You have a deed to your property so does this give you the unfettered right to sell that property to a willing buyer? Not always. Having a paper deed is different from having the title to the property. If there is a defect in the title of the property, it must be cleared before the property can be sold.
What Is A Title Defect?
A title is the legal concept of ownership between a property owner and their land. To have a title to a piece of property means that you and only you can own and use that property, which includes the right to sell the property if you wish.
However, titles can be defective in several situations. Defective titles must be cleared before a property owner can sell their land. Some examples of title defects include:
- Bank liens or tax liens on the property
- Typos in the deed or a lack of signature
- Deeds that incorrectly identify or describe the property
- Unrecorded deeds
- Mortgages on the property that are unrecorded
These title defects can be identified through a title search performed by the owner or the owner’s representative.
Fixing A Title Defect
Once the owner knows about the defect, they can take steps to fix it. For example, liens can be paid off, the property owner can go to court to have errors in the deed fixed or the property owner can record a previously unrecorded mortgage.
If there is a dispute between the property owner and another person or entity claiming ownership of the property, the property owner can file a “quiet title” action, in which they argue that they have a priority claim to the land. If the judge agrees, the property owner will be considered the legal owner of the land, and this ownership cannot be contested by anyone else.
So, if a property owner has a title that is clear of any contesting ownership claims, the property owner can use their property as they see fit. But a title defect can throw a wrench in the real estate sales process, making a title search an essential component of selling a home.