7 Shocking Title Defect Examples You Have to See to Believe

title defects

A title defect is like finding a surprise guest at a party you’re hosting – it’s an unexpected issue with the property’s ownership that can cause some real estate headaches.

You won’t believe what title defects can hide.

From a missing mortgage release to identity theft and title fraud, these real-life cases will make you question the security of your own property.

In this eye-opening article, you’ll discover seven shocking examples that will leave you astounded.

Get ready to see the unbelievable truth behind these jaw-dropping title defects.

1. Missing Mortgage Release

A missing mortgage release occurs when the lienholder fails to record the release of a mortgage after the debt has been fully paid. This can happen due to various reasons, such as clerical errors or oversight. Regardless of the cause, the consequences can be severe. Without a proper release, the property remains encumbered by the mortgage, even if the debt has been satisfied. This means that the current owner may not have a clear title to the property, and potential buyers may be hesitant to purchase it.

To rectify this situation, it’s crucial to investigate the missing mortgage release thoroughly. This may involve contacting the original lender or mortgage servicer to obtain the necessary documentation. It may also require working with a title company or attorney to ensure that all necessary steps are taken to clear the title.

2. Title Fraud

Title fraud involves criminals manipulating property ownership records to fraudulently obtain a title to a property they don’t own. This can lead to financial loss, legal battles, and emotional turmoil for the victims.

It’s essential to safeguard your personal information, such as keeping your social security number and financial records secure, regularly monitoring your credit reports, and being cautious when sharing sensitive information online.

Additionally, it’s crucial to conduct thorough research and due diligence when purchasing or selling property to minimize the risk of falling victim to title fraud.

3. Uncovering a Long-Lost Heir

The discovery of a long-lost heir is a surprising title defect that can leave many astounded. In this particular case, the title defect involves a property that has been passed down through generations without anyone realizing the true ownership.

Through meticulous research and genealogical investigations, a previously unknown heir is identified, bringing with them a rightful claim to the property. Cases like this serve as a stark reminder of the importance of conducting thorough due diligence and title searches when dealing with real estate transactions.

4.  The Hidden Lien

A hidden lien is a cloud on the title that can cause significant problems for homeowners. It’s a claim or encumbrance against a property that isn’t readily apparent from the public records. Homeowners may be unaware of its existence until they attempt to sell or refinance their property. This hidden lien can create a title nightmare, as it can prevent the homeowner from transferring clear title to a buyer or obtaining financing for a refinance.

The consequences of a hidden lien can be severe. Not only can it delay or derail a real estate transaction, but it can also result in financial loss for the homeowner. If the lien is discovered after the sale of the property, the new owner may seek legal recourse against the previous homeowner. Additionally, the homeowner may be responsible for any outstanding debts associated with the hidden lien.

5. The Boundary Dispute

Boundary disputes can occur when there’s uncertainty or disagreement over the exact location of a property’s boundaries. In some cases, the dispute can arise due to fraudulent transfers that had occurred in the past. Fraudulent transfers refer to the illegal transfer of property or assets with the intent to deceive or defraud others.

This type of title defect can affect your property’s value and your ability to use the land as you want. It’s important to resolve boundary disputes through legal means or negotiation to make sure you have a clear understanding of where your property ends and your neighbor’s begins.

6. The Forged Signature

Forged signatures defects involve individuals intentionally falsifying signatures on important documents, such as deeds or mortgage agreements, in order to fraudulently transfer ownership of a property.

Not only does it undermine the integrity of the title system, but it also puts property owners at risk of losing their investments. When a title is manipulated through forged signatures, it can result in multiple individuals claiming ownership of the same property. If this defect isn’t caught during the title search, it can also lead to legal potential loss of the property.

7. An Unseen Encroachment

Another example of a title defect is an undiscovered easement, where a third party has a legal right to use a portion of your property. These hidden title issues can arise when previous owners fail to disclose the existence of an easement or when the easement isn’t properly recorded in the public records.

To avoid these title defects, it’s essential to conduct a thorough title search and obtain title insurance. Title insurance will protect you from any undiscovered defects that may arise after the purchase. By being vigilant and taking the necessary precautions, you can ensure that your property rights are safeguarded and avoid any potential encroachments on your land.

Clear Your Title With the Titus Law Firm Today

If these seven shocking title defect examples have left you concerned about the security of your property, don’t wait to take action.

Our real estate attorneys at The Titus Law Firm can help you resolve title issues and ensure that your property rights are secure. We’ll thoroughly investigate your property’s history to uncover any potential defects and work diligently to resolve them. Your property is too valuable to leave to chance.

Don’t let title defects become a nightmare. Contact us now to get started on the path to a worry-free property ownership experience.

Author Bio

Eddison S. Titus

Eddison S. Titus is the Founder of The Titus Law Firm, a Houston estate planning, business law, and real estate law firm he founded in 2016. He has successfully represented clients in a wide range of legal matters, including will and trust creation, probate, real estate transactions, business formation, business and contract disputes, and business succession planning.

Eddison received his Juris Doctor from the Charlotte School of Law and is a member of the State Bar of Texas.

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