How to Address Title Issues When Buying or Selling a Home

 Posted on March 26,2021 in Real Estate

A residential real estate transaction can be very complicated, and both buyers and sellers will need to meet multiple different types of requirements to ensure that ownership of the property can be transferred on the closing date. In some cases, issues related to the home’s title may be uncovered, and these will need to be dealt with before the transaction can be completed. By working with an experienced real estate attorney, buyers and sellers can determine their best options for addressing these concerns.

Resolving Property Liens

A lien gives a person or organization the right to foreclose on a property if a debt is not paid. The most common liens are mortgages, and in these cases, lenders will release their claim to the property when the loan is paid off during the sale of the home. However, other types of liens may exist that may prevent the sale from being completed. These include:

• Mechanic’s liens - A contractor or subcontractor who performed work on the home may establish this type of lien to ensure that they can receive the amount owed for the work they performed.

• Tax liens - Failure to pay property taxes may result in a city or municipality placing a lien on the home. The IRS may also use tax liens in cases where a person is delinquent in paying federal income taxes or other types of taxes.

• Judgments from creditors - A person or company that is seeking to recover money owed by a homeowner may place a lien on their property. In some cases, these liens may exist because a homeowner has the obligation to pay child support or spousal support following a divorce. Even if debts have been fully paid, the creditor may not have released the lien.

In many cases, liens can be resolved if the lienholder signs a release of lien or release of judgment, giving up their interest in the property. Securing these releases can take time, and any outstanding debts may need to be paid before liens will be released.

Other Claims or Encumbrances

Claims that another party has an ownership interest in a home are another issue that may need to be addressed. These claims may arise because the current owner inherited the home from a relative, but other heirs believe that they should have received some or all of the property. In other cases, forged signatures or errors in public records may make it unclear who has the right of ownership to the property. These claims and issues will need to be resolved before the transaction can be completed.

Other issues that can affect a real estate transaction include easements that limit the use of the property or boundary disputes with neighbors. Buyers and sellers should make sure all easements, restrictions, and covenants are fully documented, and boundary issues may be resolved by performing a survey that will accurately define the property lines. Title insurance, which is usually required in residential real estate transactions, can provide protection in cases where title issues prevent the sale from going through.

Contact Our Grayslake Residential Real Estate Attorneys

Whether you are planning to buy or sell a home, Newland & Newland, LLP can provide you with legal representation throughout the transaction. We will perform a title search to uncover any issues that may affect the sale, and we will work with you to resolve these issues as efficiently and effectively as possible. By protecting your rights and financial interests, we will help you complete your transaction successfully and begin the next chapter of your life. Contact our Libertyville real estate lawyers today at 847-549-0000 to set up your complimentary consultation.

Sources:

https://www.washingtonpost.com/news/where-we-live/wp/2016/06/20/these-common-title-problems-can-snag-your-home-closing/

https://www.homego.com/blog/how-to-resolve-title-issues/

https://endpointclosing.com/insights/19-title-and-escrow-problems