How Title Defects & Encumbrances Affect a Title

When closing on a home at the Lake of the Ozarks, it's easy to get wrapped up in the excitement of finalizing the deal and getting moved in. So much so, that many buyers don't even consider the possibilities of the sale not going through or the potential problems that could arise after the sale is final. There are many things on the back end of the real estate process that most buyers and sellers don't see or even consider until there's a problem that needs to be addressed. This week, Arrowhead Title will be discussing title defects and title encumbrances and explain how they affect a title to real property.

What is a Title Defect?

A title defect is a legal claim or circumstance that hinders the verification of the title and identification of the true owner of a real property. These defects occur usually when the ownership or transfer of ownership is not properly recorded, or where any lien recorded due to an unpaid obligation was not removed on satisfaction of the obligation.

Common title defects include errors and omissions, mistakes in deed recording, incorrect marital status, and fraudulent signatures. Title defects can cause considerable problems. For instance, if the heir of a property conveys the property without opening an estate, issues may arise if there were other heirs that should have signed off on the conveyance but didn't. Working with a qualified title insurance company at the Lake of the Ozarks is the best method to resolve title defects prior to purchase and protect yourself from future ownership claims.

What is a Title Encumbrance?

An encumbrance is a claim against a property by a party that is not the owner. An encumbrance can impact the transferability of the property and restrict its free use until the encumbrance is lifted. Common encumbrances include liens, deed restrictions, easements, and encroachments.

Encumbrances prevent the property owner from exercising full control over his or her property. In some cases, the property can be repossessed by a creditor or seized by a government. Encumbrances may be filed in many different places depending on the type of lien and where the real property is located. A title examination performed by a Lake of the Ozarks title company will identify any restrictions placed on a property and any title defects that could cloud the title.

Arrowhead Title, Inc. Can Protect Your Interests

As the most trusted title company at the Lake of the Ozarks, Arrowhead Title, Inc. is here to protect you from these and other hazards that may limit or threaten your right to use and occupy your property. If you are closing on a house at the Lake of the Ozarks, choose Arrowhead Title, Inc. to assist you with the process. Visit our website at or call us at 573-302-1950 to learn more!


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