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What might lead to a title dispute affecting your property?

On Behalf of | Nov 2, 2021 | Real Estate Law |

When you buy a home, you will have money tied up in the transaction long before you are the owner. You put down earnest money right away when you make an offer to let the seller know that you mean business. Then, even after you sign documents at the closing table and fund the transaction, you technically still have to wait to become the owner.

It is only when the county recorder’s office records the updated title or vesting information for your property that you become the official owner on record. Unfortunately, the title system not only causes delays but can also lead to conflicts that can affect your property ownership.

A title dispute arises when someone else claims to have legal ownership rights to your real estate. What causes most title disputes?

Transfers due to legal matters

There are many ways for serious title issues to arise, but the transfer of real estate in conjunction with legal matters is a leading cause.

For example, during the administration of an estate, the executor may need to sell real estate in accordance with the instructions left behind by the testator. If they fail to locate a beneficiary or heir, the person who didn’t receive their inheritance or have a say in the sale might make a claim to the property later when they learn about the transfer of title. Divorces can also sometimes lead to title claims.

Fraudulent deeds

Fraud is another common cause of title disputes. When someone purchases the deed to a property, they expect to assume ownership of it. What they may not realize is that the person who signed the deed was not the owner of record and therefore had no right to transfer the title.

Often, title disputes involving fraudulent transfers involve someone receiving a quitclaim deed, as the person executing the quitclaim deed only gives up their right to the property, which might be nothing at all.

Title disputes often lead to litigation. If the owner is not successful in defending their property, the claimant may assume ownership. Owners without title insurance could lose not only their equity in the property but all their other financial investments in it, like upgrades to the major systems. Understanding the causes of title disputes can help you respond to one that might affect your property.

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