What title issues can arise when buying a property?

 

 

 

 

 

 

 

 

 

 

 

 

What title issues can arise when buying a property?

 

There are several title issues that can arise when buying a property. Some of the most common ones include:

1.      Liens and encumbrances: These are legal claims or debts against the property that can impact its ownership. They can include mortgages, property taxes, mechanic's liens, and other liens or encumbrances that may be recorded on the property's title.

2.      Boundary disputes: These are disagreements over the property's boundaries, which can arise if the property's boundary lines are not clearly defined or if the property's legal description is inaccurate.

3.      Easements: These are rights granted to others to use the property for a specific purpose, such as a utility company having an easement to run power lines through the property.

4.      Judgments and lawsuits: These are legal judgments or lawsuits against the property owner that can impact the property's ownership or title.

5.      Fraudulent conveyance: This is when a property is sold or transferred illegally, such as when the seller does not have the legal authority to sell the property.

6.      Unpaid taxes: If the previous owner of the property did not pay property taxes, the new owner may become responsible for paying them.

It's important to conduct a thorough title search before purchasing a property to uncover any potential title issues that could impact the property's ownership or value.

Liens and encumbrances are legal claims or debts against a property that can affect its ownership. They can arise from a variety of sources, including mortgages, unpaid taxes, unpaid contractor bills, and court judgments. When a lien or encumbrance is attached to a property, it means that the property cannot be sold or transferred without satisfying the outstanding debt.

Mortgages are the most common type of lien. When a property is mortgaged, the lender places a lien on the property to secure the loan. If the borrower fails to repay the loan, the lender may foreclose on the property and sell it to satisfy the debt.

Unpaid taxes can also result in liens on a property. If the property owner fails to pay property taxes, the local government can place a lien on the property. The government can then foreclose on the property and sell it to satisfy the unpaid taxes.

Contractor liens are another type of lien that can arise when a property owner fails to pay a contractor for work performed on the property. In some cases, contractors may file a lien against the property to secure payment for their services. The lien can then be enforced by a court order to force the sale of the property to satisfy the debt.

It's important to conduct a title search before purchasing a property to identify any liens or encumbrances that may be attached to the property. If a lien is discovered, the buyer can negotiate with the seller to have it removed before completing the sale. If the lien cannot be removed, the buyer may need to pay off the debt before taking ownership of the property.

Boundary disputes can arise when there is disagreement over the location of a property's boundary lines. These disputes can be caused by a variety of factors, including inaccurate surveys, unclear legal descriptions, or changes to the physical landscape.

For example, a dispute may arise if a property owner builds a fence that encroaches on a neighbouring property, or if a tree falls and damages a neighbour’s property, and the two parties disagree over where the boundary line is located.

Resolving a boundary dispute can be complicated and expensive. In some cases, the parties may be able to reach an agreement through mediation or negotiation. In other cases, legal action may be necessary to determine the proper boundary line.

To avoid boundary disputes when purchasing a property, it's important to obtain an accurate survey of the property before completing the sale. A survey will identify the property's boundary lines and any potential encroachments. It's also a good idea to review the property's legal description and check for any easements or other rights that may affect the property's use or value.

An easement is a legal right granted to someone to use another person's property for a specific purpose. Easements can be granted for a variety of reasons, such as providing access to a landlocked property or allowing utility companies to run power lines or water pipes across a property.

There are two main types of easements: appurtenant and in gross. An appurtenant easement is attached to a specific property and benefits the owner of that property, while an easement in gross is granted to a specific person or entity, such as a utility company.

Easements can affect a property's use and value, so it's important to be aware of any easements before purchasing a property. The property's title report should disclose any existing easements, but it's also a good idea to review the property's legal description and check for any rights of way or other access rights that may affect the property.

If an easement exists on a property, it cannot be removed without the consent of the party who holds the easement. However, the property owner may be able to negotiate with the easement holder to modify the easement or reach a new agreement. In some cases, the easement may also be terminated if it is no longer needed for its original purpose or if it is abandoned.

It's important to understand the implications of any existing easements before purchasing a property, as they can affect the property's use, value, and potential for development.

Fraudulent conveyance is a legal term that refers to the illegal transfer of property from one person to another. A fraudulent conveyance can occur when a property is sold or transferred without the legal authority to do so, or when the seller intentionally conceals information about the property's ownership or encumbrances.

Fraudulent conveyance can occur in a variety of situations. For example, a property owner may attempt to sell a property that is subject to a lien or other encumbrance, without disclosing the debt to the buyer. Alternatively, a property owner may transfer a property to a friend or family member to avoid creditors, while still retaining control over the property.

Fraudulent conveyance is illegal and can have serious consequences for both the buyer and seller. If a fraudulent conveyance is discovered, the transaction may be voided and the property may be returned to the original owner. The parties involved may also face legal action, fines, and other penalties.

To avoid fraudulent conveyance when purchasing a property, it's important to conduct a thorough title search and review all legal documents related to the property. This can help uncover any potential issues with the property's ownership or encumbrances. Working with a qualified real estate attorney can also help ensure that the property is being sold legally and that all parties involved are acting in good faith.