If you plan to buy or sell a house, you must already have a brief idea of the property title issues that crop up. Among so many other real estate problems, title issues at closing can significantly delay your chance of buying or selling the property.
According to statistics, the median house price in Australia was 6.6% higher in 2024 compared to 2023. In such situations, you’ll only want to speed up the property title process to ensure there are no title issues at closing.
So, let’s check out some of the most common property title issues and why they crop up!
1. Property Lien
A lien is one of the most common title issues home buyers report when they wish to close a deal. This is essentially a legal claim on a debtor’s properties or assets.
Liens can be put due to different issues, such as a tax lien being placed on the debtor by the government for not paying taxes on time.
A judgment lien is also one of the property issues reported when the homeowner loses any lawsuit and needs to repay debts to the contractor or tenant.
Even though there are different types of liens under different circumstances, the home buyer has to remember that the lien remains with the property and not the person in debt.
So, if you’re a buyer and there is a hidden lien that you don’t know about, then you will have to bear the consequences later.
2. Boundary Disputes
Boundary disputes can arise when neighbouring property owners disagree on property lines.
Boundary disputes can cause property issues and conflicts over who has lawful rights to use a certain part of the boundary, such as driveways, fences, and even any shared space.
These issues commonly occur because the land surveys are either not completed in time or are not updated in the registry.
Alternatively, years of wear and tear can also blur the boundary lines, leading to title issues at closing. To mitigate this problem and ensure a smooth deal closing, ask a land surveyor to inspect the area and create an accurate map.
If you still face problems, you can ask for legal action or out-of-court settlement using insurance money to help defend the cost of legal disputes.
3. Chain of Title Issues
A thorough title search will tell you the rightful owner of the property title, how the person holds the title, and if any other interested parties also have a legal hold on the property.
If you don’t search, you will face closing delays due to title issues. There are three main documents you need to know about, namely vesting deeds, mortgages, and mortgage assignments.
A vesting deed is a very important document that tells you who the current property owner is, and mortgage and mortgage assignment documents tell you about any outstanding owners who might already have any hidden debts.
If there are small errors in the vesting deed, such as keeping the name of any deceased owner, or any missing or inaccurate clauses in the mortgage papers, you’ll have to spend unnecessary time and money to solve these problems.
4. Undisclosed Heirs
You might unknowingly buy a property where the owner has passed away without mentioning any heirs or a documented will. In such situations, it becomes even more important to resolve closing delays due to title issues.
While a legal attorney can tell you how to clear title on a property and how long it takes to resolve title issues, you should conduct a probate check during the title search.
If there are any undisclosed heirs, take action before they resurface after your purchase to claim ownership.
You can even opt for a quiet title action where the court resolves the ownership dispute if any heir tries claiming your property after your purchase.
Here, too, title insurance can help you avoid illegal claims from unknown people claiming to be rightful heirs.
5. Easement Disputes
An easement is a legal right granted to someone so that they can use a specific portion of the property for any designated purpose. For example, utility companies hold easements over a property to use power lines or water lines on personal property.
Most easements granted are standard and shouldn’t cause any property issues, but some other types can limit how you use your property.
For example, there might already be an easement granted to a neighbour to get access to shared driveways. If you already know of such easement before finalising the deal, you might be hesitant to buy the property.
However, if you still wish to proceed with the purchase, you need to ensure that all easements are accurately documented and disclosed to you early in the process.
6. Mistakes in Public Records
There can be numerous kinds of errors in the public records of the property you’re planning to buy, all of which can significantly delay your closing due to title issues.
To know how to clear the title on your property, you need to create new filing records and compare them with the incorrect ones. Incorrect public documents can create confusion over who legally owns the property.
One of the most common mistakes you might come across is a misspelt name or an incorrect property description.
To clear this confusion and prevent any further title issues at closing, get in touch with the local county or municipal office and ask to record updated documents. If it takes too much time or money, ask a real estate attorney to help you out.
Conclusion
For any kind of property-related disputes or settlements, you should always get in touch with a licensed professional legal attorney. They will tell you what title means in real estate, how long it takes to resolve property issues and be your guide throughout the process. So don’t wait anymore and start looking online!
If you’re wondering where to seek help with a title search, contact us at Title Check, and our experts will help you out!
