Don’t let common property title issues derail your home closing

Written by Posted On Friday, 25 September 2020 08:27

We are sharing with our readers a recent published story in Bankrate.com, in which our partner, Roy Oppenheim, was asked for his opinion as to real estate title issues.

Don’t let common property title issues derail your home closing

A new home becomes part of your life’s story — but the home you’re buying has its own story, and it may have left off on a cliffhanger.

Unresolved issues with a home’s title can create major setbacks when the property is bought or sold. Unpaid debts, divorce, property line disputes or even a typo in the property’s records can make it unclear who legally owns the home. These issues need to be resolved before a seller can transfer ownership of their home to a buyer.

Here are some things to look out for, and what happens if an issue pops up.

Common title issues

There are a number of obstacles that can stand in the way of a clear title transfer from seller to buyer. Roy Oppenheim, a real estate attorney in Weston, Fla., says usually those obstacles fall under one of two categories.

“You have fraud, and you have mistakes,” Oppenheim says.

Here are some of the most common issues:

1. Public record errors

Problems can arise when there are mistakes in the property’s deed, the legal document that spells out the details of ownership and specifics about the property. If there is a clerical error or missing information in the deed, it will need to be fixed and the deed re-filed before closing can take place.

2. Liens

If the seller has unpaid debts or taxes, the bank, business or government entity they owe can place a lien on the property, meaning that whoever is owed the money puts a legal claim of ownership on the title of the home. Usually, this lien can’t be removed until the debt is repaid. If the seller happens to have the same name as someone else who has unpaid debts, a judge could mistakenly file a lien against the property, as well.

3. Unclear boundaries

If the home’s property lines are not clearly defined, a neighbor or public entity may be able to claim ownership to part of the property, such as if the property encroaches on someone else’s land or part of the property is on public land.

4. Illegal deeds, forgery and fraud

A previous owner may have documented their title illegally, such as if the deed includes an undocumented immigrant, a minor, a person of unsound mind or a married person who claimed to be single.

In the case of outright fraud, a person might show up at the closing claiming to be someone they’re not — such as the seller’s spouse — or, someone might forge or fabricate legal documents to claim ownership of the home.

“If you’re not careful, you can end up paying off someone you’re not supposed to be paying,” Oppenheim says.

5. Unknown or missing heirs

Ownership disputes can arise if the property owner died before selling the home. Family members who were missing when the person died might eventually step forward to claim their inheritance or contest the owner’s will for ownership — or, the owner’s will itself could have been missing and then discovered right before closing, with stipulations about who rightfully owns their home.

Finding and fixing title issues

Title companies and real estate attorneys are third parties that help identify and resolve property title issues during the mortgage closing process.

Here’s a breakdown of each role:

  • Title company – A title company researches the property in question to make sure the title to the home is legitimate and that there are no defects. The company also provides title insurance as protection against any issues that might surface in the future. Title companies offer this coverage to protect the lender and the buyer from any losses related to property title issues, such as if an issue needs to be remedied in court.
  • Real estate attorney – Also called a closing attorney, a real estate attorney can help you settle any title issues that arise, as well, including ownership or boundary disputes, a contested will or a lien on the property. An attorney can also re-file public documents to correct errors. “A title attorney is essential because they are going to hand you a clean title at closing,” according to Al Sidhom, Realtor with Witry Collective in New Orleans.

It takes a lot of legwork to make sure there are no title surprises before closing. The primary research the title company or attorney conducts is called the title search, which consists of looking up any and all public records that exist on the property.

This is necessary due diligence that can help expose any liens, land restrictions or other issues that might get in the way of completing the sale. A title company can conduct an exhaustive search of public records going back decades to look for errors, wills, debts, bankruptcies and inaccurate property details ahead of time.

Upon request, your title company may also be able to conduct a permit history search. It’s important to note, however, that title reports usually don’t list open permits, nor do title insurance policies provide coverage if these emerge, so it’s up to the seller to ask.

An outstanding permit for previous work on the home may cause a lender to back out on financing, and it can create major headaches for the new homeowner when it comes time to remodel or repair the home.

“If you have an open electrical permit on your home that was never closed out, it will prevent you from getting any other permits in the future,” says Sidhom.

To help prevent boundary disputes, on the other hand, an up-to-date property survey can clearly delineate property lines. Sidhom recommends this to buyers who are purchasing a property without a fence already installed.

“With the property survey, you get specific markers for where your property begins and ends,” says Sidhom.

If the attorney’s or title company’s work falls short, title insurance offers protection to get any undiscovered issues resolved. Lenders usually require the borrower to obtain a lender’s title insurance policy, but this kind of policy only protects the lender. You must purchase a separate policy for owner’s title insurance if you want to protect yourself.

All title search, legal fees and title insurance are usually tied into your overall closing costs.

“People think title insurance is a necessary evil to closing, an expense, but it has saved my clients a lot of money when something goes wrong,” Oppenheim says.

Oppenheim Law 
2500 Weston Rd #209
Fort Lauderdale, FL 33331
954-384-6114
https://www.oppenheimlaw.com 
Originally posted at: https://www.bankrate.com/mortgages/common-property-title-issues/ 

 

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Roy Oppenheim

Roy Oppenheim has been practicing law since 1987 focusing his practice on all phases of real estate and real estate development and redevelopment from land acquisition to multifamily, retail, office hotel, industrial and mixed use development, as well as single family home development for sale and rent. Mr. Oppenheim has routinely represented developers, investors, home buyers and lenders in these commercial transactions in Florida and elsewhere in the United States. He has been involved in virtually every stage of the development process from acquisition, due diligence, title insurance, financing and closing of such projects. Mr. Oppenheim’s client turn to him for his sharp legal acumen along with his entrepreneurial background that allows Mr. Oppenheim to approach each matter from a pragmatic and refreshing background. Further, clients enjoy Mr. Oppenheim’s infectious passion for his involvement in their business as well as his unbiased legal opinion based on a holistic approach; rather than from a siloed perspective. From analyzing, negotiating to structuring deals, Mr. Oppenheim’s clients turn to him time and again for his advice. Mr. Oppenheim also represents Florida real estate brokers and Realtors, individual buyers, and sellers in connection with the purchase and sale of Florida real property as well as litigates real estate disputes involving both residential and commercial properties. Mr. Oppenheim also served as outside general counsel for various Florida companies over the past 30 years providing sound legal advice to start ups as well as mature businesses concerning various business and corporate matters including governance, expansion, acquisitions, borrowing, commercial litigation, and employment related matters. The myriad of businesses Mr. Oppenheim represents is vast including from the fields of retail, hospitality, entertainment, healthcare, technology, import-export, and wholesale. Many of these businesses have both a physical and/ or online presence. Mr. Oppenheim here again brings his over three decades of legal knowledge and business experience to his clients and their respective businesses. After Working for Milbank Tweed on Wall Street and White & Case in Miami, Mr. Oppenheim founded Oppenheim Law in 1989 with his wife Ellen Pilelsky where they began representing Arvida development and its various home builders amongst numerous national banks such as Northern Trust, Chase Bank and SunTrust Bank for over 15 years. Serving national, international, and local clients, Mr. Oppenheim has the highest rating (A-V) conferred by Martindale Hubbell Law Directory, the most respected directory of lawyers and law firms in the U.S. He has also been selected as a “Best Real Estate Lawyer in the United States” since 2012, a designation of only 5% of all Lawyers. The Firm also has a 10.0 rating, the highest rating from AVVO another distinguished national rating service. In 1989, Mr. Oppenheim also co-founded and served as general counsel to ShopSmart Corp., the company that originated and owned the GNC Gold Card Program, a program that continues to this day and was one of the first cross-promotional programs of its kind. In addition, in 1994, Roy co-founded Weston Title & Escrow, the oldest title company in Weston, Florida that serves all of Florida and has closed in excess of three billion dollars in transactions. Mr. Oppenheim currently serves as its Senior Vice President. In 1999, Mr. Oppenheim also served a one-year term on the board of directors for Catalina Lighting, a publicly traded company on the New York Stock Exchange. Mr. Oppenheim is also designated by the Florida Secretary of State as an International Civil Law Notary, one of only 137 out of 106,000 attorneys in the State. In 2008, during the foreclosure crisis and the Great Recession, Mr. Oppenheim and his team of lawyers represented 1000’s of homeowners that were unable to pay their mortgages and were facing foreclosures. Facing daunting odds and the rath of large foreclosure mills funded by the big banks Mr. Oppenheim helped establish a new legal practice area of foreclosure defense while helping these homeowners defend themselves against the banks. During that time Mr. Oppenheim became an outspoken critic of the banks and started the Southfloridalawbog.com which was voted the best business and technology blog by the South Florida Sun-Sentinel. The blog was syndicated to Yahoo! Homes, and Newsweek. Mr. Oppenheim routinely appeared on HuffPost Live, FOX News, and Lifetime TV and on WLRN Radio. In addition, he has been quoted in prominent national publications, including USA Today, The New York Times and Huffington Post, among others. Mr. Oppenheim has also co-authored and two law review articles, Deconstructing The Black Magic of Securitized Trusts, published in the Stetson University Law Review’s Spring 2012 Edition, and The Emperor’s New Clothes, published in the William & Mary Business Law Review Volume 6. Both addresses systemic legal problems with the residential foreclosure process at the time. During that time Mr. Oppenheim became an outspoken critic of the banks and started the Southfloridalawbog.com which was voted the best business and technology blog by the South Florida Sun-Sentinel. The blog was syndicated to Yahoo! Homes, and Newsweek. Mr. Oppenheim routinely appeared on HuffPost Live, FOX News, and Lifetime TV and on WLRN Radio. In addition, he has been quoted in prominent national publications, including USA Today, The New York Times and Huffington Post, among others. Mr. Oppenheim has also co-authored and two law review articles, Deconstructing The Black Magic of Securitized Trusts, published in the Stetson University Law Review’s Spring 2012 Edition, and The Emperor’s New Clothes, published in the William & Mary Business Law Review Volume 6. Both addresses systemic legal problems with the residential foreclosure process at the time. Admissions Florida Bar, 1987; Member of the Real Property Probate and Trust Law Section New York Bar, 1987; United States District for the Southern and Eastern Districts of New York, 1987 U.S. District Court, Southern and Middle Districts of Florida, 1993 Education Princeton University, A.B., cum laude, 1982 Northwestern University School of Law, J.D., 1986 Member of the Northwestern University Law Review Member of the National Moot Court Team

https://www.oppenheimlaw.com

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