Did you know that hidden defects can exist in a deed of title? In previous posts we discussed 2 types of deeds: quitclaim deeds and warranty deeds.
We learned that grantees could get certain protections through warranty deed property transfers. Another way that grantees can protect themselves is by purchasing title insurance. We’ll discuss title insurance further in another post. For this post we focus on hidden defects not uncovered during a public records search.
Sections
What is a title defect?
A title defect is anything such as a lien, judgement, or mortgage that can make it difficult for a property owner to legally transfer ownership of the property to another person.
While public record searches can discover most title defects, in some situations they are not apparent. Below are 4 examples of hidden defects.
Forged document defects
Property-related documents such as mortgages or deeds can be forged or executed fraudulently. These incidents are not always evident from a search of the public records.
Last September, according to an article on nbcmiami.com, a couple was arrested for obtaining ownership of a property without the owner’s knowledge. They somehow obtained the homeowner’s personally identifiable information to forge a bogus warranty deed and file it with the county clerk.
Legal description defects
Errors or omissions in the legal description of the property could result in boundary disputes or other title issues that are not immediately apparent during a public record’s search.
Undiscovered liens
While searching public records can uncover most liens and encumbrances on a property, some such as tax liens, judgment liens or mechanic’s liens are hidden. Then they are missed in the recording. If a lien is discovered after the transfer of property and the grantee has title insurance the title clerk will attempt to clear the title defect and submit a corrected deed to the county clerk for recording.
Competing claims of ownership
Sometimes, there may be multiple claims of ownership to a property, which can be difficult to discover through public record searches. This type of hidden defect may require extensive research of probate court records, business records, or other archived records.
Conclusion
Hidden defects in deeds of title are a headache for current owners, potential homeowners, and title clerks. Protect yourself against any unforeseen title issues by purchasing an owner’s title insurance policy. Need a same day document notarization? Call me to set an appointment.
Bonus * If you own a home in Palm Beach county you can get alerted to potential deed fraud attempts by signing up for property fraud alerts on the Palm Beach county clerk’s website.
*I am not an attorney therefore the information in my posts is not legal advice.
