Purchasing a home is one of the most important investments. Therefore, a lot must be addressed so people don’t make mistakes. A title is a legal concept tracing a chain of ownership in real property ending in the current owner’s legal right or “title” to the property. Many title issues can occur if a person has limited knowledge of property rules and regulations in Florida. We will discuss common title issues that realtors should know about.
Title services are one of the best way for smooth transactions without any issues.
10 Common Title Issues
Considering the need to raise awareness regarding common title issues, we have compiled a list of such issues. They have been discussed and elaborated on in detail so realtors can keep themselves safe from all kinds of problems.
1- Public Record Errors
This law provides that any records made or received by any public agency during its official business are available for inspection unless specifically exempted by the Florida Legislature. Hence, if there are any public record errors, then most probably, there will be title issues.
2- Survey Errors
If there were errors during the survey of the property, then it could cause a lot of issues for the title of the owner. Systematic survey errors are the main kind of error that can ruin the reputation of realtors and sellers. Hence, such things need to be dealt with in fairness.
3- Liens
In Florida, a lien is valid only for a year unless a lienor files a lawsuit to enforce the lien for further duration. Realtors must ensure that they are thoroughly aware of lien to avoid title issues. The following are some of the types of liens:
Tax Liens
A tax lien is a legal claim against the assets of a person or business who fails to pay taxes owed. With a tax lien certificate, an investor is purchasing the right to collect the taxes and place a lien on a property.
HOA Liens
Under Florida law, an HOA may only file its lien if it first provides the homeowner with a written demand by registered or certified mail, return receipt requested, and by first-class mail that provides 45 days to pay all amounts due.
Mortgage Liens
Normally, a mortgage lien is a financial claim that people make for their property that acts as collateral for a mortgage. It means that if the person stops making payments, then according to the lien, the lender takes possession of your home to sell it. Hence, the lender can recoup the debt that was required to be paid
Judgment Liens
A judgment lien in Florida is filed with the Florida Department of State. When a creditor sues the owner, they can place a lien after the court rules in their favor. In Florida, the validity of the judgment lien is five years. But state laws allow a creditor to extend the term for another five years. You may want to conduct a judgment search before you obtain county lien letters. That way, you can unearth all details about the property before closing.
Consensual Liens
A consensual lien is typically a result of a loan or other credit advance. In many cases, the asset that the borrower acquires secures the borrower’s obligation to pay for such asset. One common example is the residential mortgage or deed of trust. In this example, the purchaser of the home consents to a bank taking a security interest in the home when a mortgage or deed of trust is recorded against the property. Where the lender advances credit to a borrower specifically for the purchase of the property that secures the debt, the lien is called a purchase-money security interest.
Mechanic’s Liens
A mechanics lien is a legal tool that provides the unpaid party with a security interest in the property. In Florida, the certain parties are entitled to mechanics lien rights (referred to as “construction liens” in FL) direct contractors, subcontractors, material suppliers, equipment lessors, and laborers when they perform work for the permanent benefit of property and land. Architects, engineers, surveyors, and other design professionals, who are entitled to file a mechanics lien for their services that are for the improvement of real property.
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4- Unclear Boundaries
Having unclear boundaries on your property can be a sensitive issue. It means that your property has no clear ending or starting boundaries and may cause a lot of dispute while selling or buying. Normally, there should be a clear boundary between two properties to keep the process legally clean. Furthermore, Florida state law does not require homeowners to build fences around their property, and neighbors do not have to divide their land with fences.
5- Easement
Easements are created by contracts in order to use someone’s land without sharing profits. The basic intention of creating this is to make it convenient for the land owners. However, both parties should respect the terms that have been set in the easement contract. If they are violated, then it can create a lot of issues. It can cause legal trouble for one or both sides.
6- Encroachments
In general terms, encroachment is meant when an intruder invades someone else’s property. However, in this context, it means when someone occupies any portion of the land that is not mentioned in the deed. Such issues can be highly dangerous for realtors. If they are buying a home and end up doing any kind of encroachment, then it will not just portray them badly, but it will also cause title issues. Therefore, realtors should be cautious in such cases and ensure they don’t unnecessarily invade anything.
7- Illegal Deeds, Forgery, and Fraud
Florida’s laws are very strict when it comes to forgery. If a person alters or falsifies any document, then that is considered illegal. Not only does it affect the title of his properties, but it also creates a lot of other legal issues. The court can take any action on that person based on this illegal and criminal act. The crime of forgery is considered to be a third-degree felony in the state of Florida. The person can be given a punishment of up to 5 years in prison and a possible fine of $5,000.
8- Unknown or Missing Heirs
If there are missing beneficiaries during a property sale in Florida, then it can cause a number of issues. In such a case, estate executors should ensure that they find these beneficiaries/heirs quickly in order to avoid trouble. If they are unable to be found, then the administrative process of the property sale will most probably be delayed. Hence, missing and unknown heirs can be very harmful for the realtor while buying any property.
9- Zoning Issue
Zoning requires that all involved property owners relinquish some of their individual property freedoms for the common good. Zoning can discourage some development in certain locations. Zoning can increase the cost of building new structures. If these zoning laws are not thoroughly followed, then they cause certain problems. Owners of buildings and properties that do not adhere to these laws are subjected to fines. Zoning laws regulate guidelines such as the size of the land, usage of the land, the height of buildings, and the distance between roads and buildings, etc.
10- Title Document Errors
Title document errors are the errors that are made on the ownership contract of the property. These errors could be systematic or random. It means that either someone deliberately made those errors or those errors were made mistakenly. In either case, it is not good for the property owner and the other person involved in the transaction.
Vesting Deed
This term is often used in the world of property selling. It describes transferring the rights of title and ownership of property from the seller to the new owner of the property. It is always important for new buyers to consult professionals while vesting the title to their name to make sure they keep the process legal. There’s always a possibility of title document errors during this process.
What are incurable Title Defects?
This is a term can is often used in the world of real estate. An incurable defect occurs when a land or property is located in a low desirable surrounding. If a building or a property is located right near a railway station, then it can be considered an incurable title defect. Because, by any means, you cannot transfer to that railway station on your own just for the sake of that building or property. Any defect that is impossible to be corrected can be considered an incurable title defect. Not only do these cause issues, but they can also play a role in lowering the value of a place or property.
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Conclusion
In conclusion, it is highly important for realtors to take care of minute details while performing any property transaction. They must ensure that they do not commit any title issue by staying cautious. However, there is always a possibility of the emergence of these issues. In such scenarios, it is recommended to take immediate action so that the transaction process speeds up. Nothing should be left to chance, and rigorous efforts must be made for the success of the transaction. To ensure a smoother transaction and address potential title issues, consider how our title services can address common issues.
Title insurance protects the buyer from defects in the title. It empowers the buyer from all defect-based issues present in the title.
Seller’s defect refers to any legal, physical, or financial issue with the property being sold, such as liens, encumbrances, or undisclosed problems.
Title searches take time due to the complexity of examining historical records, deeds, and liens to ensure a clear title, preventing any potential legal issues or claims.
