Purchasing a home or real property is most likely the biggest financial investment of your life. Why not protect that investment? You get health insurance and car insurance, why not get an owner’s title insurance policy? An owner’s title insurance policy protects you from title defects that may be discovered after you have purchased the property. Some common title issues are:
- Errors in Public Records: to err is human, to correct, costly. We are human and humans make mistakes. Sometimes it takes careful inspection to discover errors when made. These errors or mistakes can affect your home ownership rights. Clerical or filing errors could affect the deed or survey of your property and result in undue financial hardship in order to resolve them.
- Forgeries and Fraud: forgery is the crime of falsely and fraudulently producing, making or altering a legal document. Sometimes forged or fraudulent documents that affect property ownership are filed in the public records. A deed may be forged by someone seeking to transfer legal ownership of a property without the knowledge of the true property owner. E.g. John Doe Jr. sells a house and forges a deed as John Doe Sr. unbeknownst to John Doe Sr. The buyer goes to move into their new home and is surprised that John Doe Sr. is living there and has no idea of the sale of his home. This will affect your rightful ownership and opens you up to the risk of losing your property.
- Undiscovered Encumbrances and Liens: when you purchased your home, you may not have known that a third party may hold a claim to a part or all of your property due to a former lien. The former owner(s) of your property may not have been diligent with bill paying or may have had a judgment against them by a creditor. A judgment against a person becomes a lien on real property when a certified copy of the judgment is recorded in the public records of the county where the property lies. Undiscovered encumbrances can cloud title and challenge ownership.
- Unknown Easements: while you may own your new home, an unknown easement may prevent you from enjoying it as you would like. The easement may allow government agencies, businesses, or other parties to access all or parts of your property. The existence of an easement may not result in unmarketable or defective title, but it can still affect your right to enjoyment of the real property.
- Missing or Unknown Heirs or Beneficiaries: when a person passes away, ownership to their home may pass to their heirs, beneficiaries or those people named in their will, if there is one. Issues with probate can often lead to title defects. Sometimes, the heirs or beneficiaries of the decedent are missing or unknown at the time of the decedent’s death. These missing or unknown heirs or beneficiaries may come forth long after you have purchase the property and contest their right to the property. This can create a cloud on the title and affect your ownership rights.
- Foreclosure Issues: according to a report from RealtyTrac, Florida was among the top three of the highest foreclosure rates in the nation. Foreclosures were being processed quickly and some of these foreclosed properties may have title defects, if service of process was ineffective or not all necessary parties were joined in the action. These defects may result in the setting aside the final judgments which can affect your right to title as an independent third party purchaser. The foreclosure action should be carefully evaluated.
- Homestead Concerns: the failure to indicate on the deed the grantor’s marital status and whether the property is the grantor’s homestead is a title defect. Under the Florida Constitution, for a married person to alienate homestead property, the spouse must be joined. Spousal joinder on the deed is required where 1) the grantor is married at the time of the deed; and 2) the property is the grantor’s homestead. If a deed is recorded without indicating the marital status of the grantor or the homestead status of the property, it creates a cloud on title because of the uncertainty. This issue may be addressed by recording a corrective deed or an affidavit.
KEEP CALM. BUY TITLE INSURANCE
When you purchase real property, make sure that you are protected with title insurance. Only an Owner’s Policy fully protects the buyer should a covered title problem arise with the title that was not found during the title search.
Contact Giannell Title for more information.