When people think of buying a house, there are plenty of factors they consider, such as price, location, size, and so on. However, the state of a property’s title can potentially have a major impact on your real estate transaction, and may invite potential litigation if they are not resolved before closing. Here are the reasons you should make sure you perform a title search before you close on your real estate deal:
- The property may have an undisclosed mortgage or lien on the property
- One of the bigger potential issues you could find during a title search is if the property still has an unpaid mortgage or lien against it. So long as this mortgage or lien is not resolved, the creditor or lien holder has a property interest that they might use to try to foreclose on the property. Ultimately the unsatisfied mortgage or lien may keep they buyer and seller from completing the transaction. There is also the possibility of substantial litigation as everyone tries to work out who is responsible for paying off those debts and/or removing the mortgage/lien from the record.
- There may be unpaid taxes that need to be dealt with
- Private creditors are not the only ones who can potentially cause problems for people looking to buy or sell a property. Local governments demand property owners pay taxes on their properties regularly, and people who fall behind on their taxes may find themselves facing legal trouble until their back taxes are paid off. Fortunately, a title search can discover the existence of these unpaid taxes, allowing you to address them before it is too late.
- There may be issues with public records
- Even when people try to do everything right, there may still be mistakes that can complicate the transfer of title. Public records around the property may be wrong, such as having incorrect survey information or failing to have an accurate description of the property. A title search can help you discover these errors and fix them, avoiding potential litigation over any issues with those records.
- There may be undisclosed easements or covenants
- It is common for many properties to have easements or covenants on the land that restrict how a property can be used. While a seller is supposed to disclose all easements and covenants prior to the sale, it is possible they miss something important. Without a title search, a buyer could face serious legal trouble for violating the terms of a covenant or impinging on an easement.
- Important documents may have been forged or falsified
- No matter how trustworthy someone seems, there is always the risk that they, or someone else involved in the ownership of the property, could forge or falsify official documents. This could throw ownership of the property into question, and in extreme cases, could lead to potential criminal liability. That is why you should always make sure to have your deal reviewed by a real estate lawyer, who can help you to discover any problems and deal with them before they become too much of a problem.
At David J. Lorber & Associates, PLLC, we assist clients throughout New York who are looking to buy or sell real estate. We will guide you through the process and help you minimize your legal and financial risks. Call us at (631) 750-0900 or contact us online to schedule your Free consultation at our Setauket office.
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