What Are Property Title Defects? Title and Real Estate Closing Expert Bryan Nazor Gives the Scoop

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Bryan Nazor Shares Common Types of Property Title Defects to Look Out For.

If you hear about a property title defect, you may find yourself wondering exactly what this is and how it can happen. Bryan Nazor, a title and real estate closing expert, said a property title defect (sometimes known as a “cloud”) is a threat to the property owner’s right or claim to a property. If a property owner’s claim to a property is in question, the issue must be resolved before it is possible to sell the property.

One common type of property title defect is when there are unknown heirs to a property, Bryan Nazor explained. Sometimes, long after the passing of a previous property owner, a previous unknown heir will come forward with a will that bequeaths the property to them. This is one of those situations Bryan Nazor said he has seen in his career that can suddenly call into question the property title a person may have.

Another type of property title defect comes from forgeries. Forged documents that are filed in the public record giving property rights to a dishonest party could jeopardize a new owner’s rights. In a similar vein, illegal deeds are deeds that are signed by parties that render it invalid. If a deed is signed by a minor or a person of unsound mind, the chain of title and owner’s new rights to a property can be called into question, according to Bryan Nazor.

Unknown liens can also threaten a property title’s validity, Bryan Nazor said. If a previous owner of a property is behind on their payments, it can result in a lien on the property. That debt stays with the property, regardless of who becomes the new owner of the property.

Sometimes, a simple error in the public records can lead to a property title defect, according to Bryan Nazor. Filing or clerical errors can have a big impact on the validity of a deed or a survey of property.

All these problems with property titles can be complicated and take time and money to sort out, Bryan Nazor said. This is why it is important to purchase property title insurance. It protects against events that occurred in the past of a property and the people who owned it. Property title insurance is purchased at a one-time premium, paid at the close of the escrow. To protect against the unknown and potential issues that can arise with property insurance, it is wise to purchase this property title insurance, Bryan Nazor counseled.