Think of the title to a property as its foundation. If the foundation is cracked or unstable, the entire structure is at risk. Similarly, a defective title can undermine your ownership rights and create significant legal problems.
Understanding how to spot potential title problems can save you time, money and stress in the long run.
Warning signs of a weak title
Here are some key indicators that you may have a bad title:
- Liens or judgments against the property
- Incorrect property descriptions
- Missing heirs or undisclosed owners
- Forged documents in the chain of title
- Errors in public records
- Undisclosed easements or encroachments
- Boundary disputes with neighboring properties
In Florida, sellers have a legal duty to disclose any defects, issues or problems they know about regarding the property. Not all sellers may be aware of these issues, and some may intentionally withhold information.
What can you do?
A title search involves examining public records to verify the property’s ownership history and identify any potential claims or encumbrances. While you can perform a basic search yourself, it is best to work with a professional title company or a skilled real estate attorney who can spot red flags that might not be obvious to the untrained eye.
Florida law also mandates using title insurance in most real estate transactions. While not a substitute for a clear title, this policy protects buyers and lenders against financial losses due to title defects not discovered during the initial search.
If you suspect issues with a property’s title, do not proceed with the purchase until you have addressed your concerns. Attempting to resolve title problems after closing can be costly and time-consuming. In some cases, you might even risk losing your investment.