The moment you receive the keys to your new home is supposed to be a triumph. But what happens when, weeks or months after closing, you discover a hidden issue not with the plumbing, but with the legal ownership of your property? This scenario, where your dream home becomes a legal nightmare, is more common than many homeowners realize.
What a “Title Issue” Means for Homebuyers?
A “title issue” or “title defect” is any problem that could challenge those ownership rights. Unlike physical damage to the property, like a leaky roof, a title defect is a legal encumbrance that can prevent you from freely using, selling, or mortgaging your home. These issues can arise from clerical errors, undisclosed heirs, or outright fraud, creating a cloud on your title that must be resolved to secure your ownership.
Common Types of Title Defects You Might Encounter
Title defects come in many forms, each with unique implications for homeowners. Common issues include:
- Undisclosed Liens: A previous owner may have unpaid debts (like taxes, contractor bills, or child support) that were attached to the property as liens. These give creditors a legal claim against your home.
- Boundary Disputes: A neighbor may claim that your fence, driveway, or another part of your property encroaches on their land, often due to an outdated or inaccurate survey.
- Errors in Public Records: Simple clerical mistakes in deeds or other property records can create significant confusion about ownership.
- Illegal Prior Deeds or Forgery: A past deed in the chain of title may have been created illegally or by a person without the legal right to sell.
- Undisclosed Heirs: Someone who was legally entitled to the property through an inheritance may appear years later to stake their claim.
The Immediate Action Plan: Your First Steps After Discovery
When a potential title issue surfaces, your initial response is critical. A measured, organized approach will provide the best foundation for a successful resolution.
Step 1: Assess the Situation Calmly
The discovery of a title defect is stressful, but panic can lead to hasty decisions. Take a deep breath and focus on gathering information. Understand the nature of the claim being made against your property. Who is making the claim? What is the basis for their dispute? A clear-headed assessment will help you communicate the problem effectively to the professionals who can assist you.
Step 2: Review Your Closing Documents Thoroughly
Your first resource is the folder of paperwork you received at closing. Locate and carefully review your owner’s title insurance policy, the deed to the property, the property survey, and the purchase contract. These documents define your ownership rights and outline the protections you have in place. Pay close attention to the details of your title insurance policy, as it is specifically designed to protect you from these types of post-closing surprises.
Step 3: Document Everything Related to the Issue
Start a dedicated file for this issue. Keep copies of all correspondence, including letters, emails, and notes from phone calls. Document the date, time, and content of every interaction related to the dispute. This detailed record will be invaluable when you file a claim or discuss the matter with a real estate attorney.
How A Real Estate Litigation Lawyer in Vancouver from Hoogbruin & Company Can Help?
Our lawyers can review your case, communicate with all parties involved (including your neighbor, the sellers, or lienholders), and represent you in negotiations. Hoogbruin’s team can also review any settlement offers from the title company and advise you on whether to accept. If the situation escalates, our team will be prepared to represent you in mediation or a lawsuit.