7 Defects that Could Negatively Affect Your Title

Title insurance provides one-of-a-kind protection for property owners and lenders. Whereas other types of insurance focus on the potential of financial loss relating to the property itself, title insurance guards against financial loss that may relate to an owner's right to use and occupy his land. If you are new to the world of real estate, you may be wondering what types of hazards could potentially threaten homeowners in this way. Here are 7 defects that could negatively affect your title.

1. Ownership Interest
When you purchase or otherwise come into ownership of real estate, you gain an ownership interest in it. Ownership interests in real estate can be solely held or divided among several people. You can convey your ownership interest, but you can't compel any fellow owners to sell their ownership interests in a jointly owned house, nor can you sell the entire house without their permission. This is a common issue that arises with ownership interest.

2. Improperly Recorded Documents
Clerical or filing errors could affect the deed or survey of your property and cause financial strain in order to resolve them. A corrective deed can be filed for minor mistakes, such as misspelled or incomplete names, missing or wrong middle initials, and omission of marital status or vesting information. It can also be used for obvious errors in the property description. For larger errors or to include/omit a name from the existing deed, a new standard conveyance, such as a warranty or quitclaim deed, may be more appropriate than a correction deed.

3. Fraud
Common and similar names can make it possible to falsely "impersonate" a property owner. If you purchase a home that was once sold by a false owner, you can risk losing your legal claim to the property.

4. Forgery
Sometimes forged or fabricated documents that affect property ownership are filed within public records, obscuring the rightful ownership of the property. Once these forgeries come to light, your rights to your home may be in jeopardy.

5. Liens
Prior owners of your property may not have been meticulous bookkeepers — or bill payers. And even though the former debt is not your own, banks or other financing companies can place liens on your property for unpaid debts even after you have closed on the sale. This is an especially worrisome issue with distressed properties.

6. Encroachments
At the time of purchase, you may not know that a third party holds a claim to all or part of your property — due to a former mortgage or lien, or non-financial claims, like restrictions or covenants limiting the use of your property.

7. Easements
You may own your new home and its surrounding land, but an unknown easement may prohibit you from using it as you'd like, or could allow government agencies, businesses, or other parties to access all or portions of your property. While usually non-financial issues, easements can still affect your right to enjoy your property.

Arrowhead Title, Inc. Is Here To 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 buying a house at the Lake of the Ozarks, we hope you'll consider Arrowhead Title, Inc. to assist you with the process. Visit our website at www.ArrowheadTitle.com or call us at 573-302-1950 to learn more!


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