Prospective buyers are wise to complete due diligence before finalizing a real estate transaction. This will likely include a title search. When it comes to real estate, this generally encompasses all the rights that result in full or absolute ownership of property. As a result, buyers can use the information from the title search to see if there are any ownership issues with the property.

What can cause an issue with the title?

Any other claim to ownership of part or all the of the property can cause a problem with the title. Common examples include:

  • Property line. The actual boundary can lead to a dispute that causes problems with a title. This can be the result of an inaccurate land survey or an attempt by a neighboring property owner to push the boundaries further than they should.
  • Easement. Easements are agreements about use of land. For example, a property owner may own a driveway that leads to another property. In order for the owner of the second property to access their land, they would need an easement or legal grant to enter from the first property owner. Issues can arise about use and the cost of maintenance of the driveway.
  • Liens. A contractor, sub-contractor or other worker may place a lien on a piece of property if the prior owner did not pay their bills. If not addressed, this can result in issues for future owners.

Once a potential buyer discovers these issues, they can decide how to proceed.

What are my options if the property’s title is encumbered?

If there is an issue with the title, it may be referred to as an encumbrance. One way to address an encumbrance is with a quiet title action. This legal proceeding can help remove title defects, like those listed above, and clarify ownership.

Prospective buyers are wise to take two lessons from this piece. First, the importance of thorough title search prior to closing on a real estate deal. Second, that there are options if issues are discovered.