Common Title Defects That Can Affect Ownership

Spring is a popular time to buy property, especially here at the Lake of the Ozarks. Whether you are buying residential property, vacation property, commercial property, or a piece of land, purchasing title insurance is a crucial step in the process. There are a lot of different reasons you should purchase title insurance with Arrowhead Title, Inc, the Lake of the Ozarks most trusted title company. One major reason you should have title insurance is because there could be a defect in the title that you are not aware of. Here are some common title defects that can affect ownership.

Seller Does Not Own the Property
It may seem unlikely, but it is possible that the seller does not actually own the property you are trying to buy. You could be dealing with unethical sellers, or the property could unknowingly be in someone's will. When someone dies, and they leave property in their will, it is not uncommon for them to leave the property to multiple people/family members. In this case, every person that the property was left to must sign the deed. Let's say the property is inherited by four people, if only three of the four heirs sign the deed, the deed is not clear. All titles should be thoroughly searched for unknown heirs and free of any title issues. That is why it is so important to have title insurance. Arrowhead Title, Inc, where accuracy matters, is here to protect you from any title issues your future property may have.

Property Liens
Doing a land record search will disclose any information regarding a possible property lien. A property lien is a claim or right to property, typically because someone has loaned the current property owners money. If there is a lien on the property, the property could be subjected to foreclosure if the lien is not paid. There are a few types of liens that could be on the property. These liens include:
  • Judgment Lien: A court ruling that gives a creditor the right to collect unpaid debts through a property lien. A judgment lien could be placed for many circumstances. For example, you get into a car wreck where you at fault. If your insurance does not cover the cost of all the damages, you are liable to pay for the remaining damages out of pocket. If you do not pay for the damages, the court can issue a lien on your property. The property owner cannot sell the property until the debt is paid for. 
  • Tax Lien: If the sellers have unpaid property taxes, they will put a tax lien on the property. The property can't be sold until the sellers pay the property tax. 
  • Mortgages: When you take out a home loan, you technically have a lien on your property until the mortgage is paid off. The sellers must sell the home for what the remainder of the loan balance is to pay off the existing loan. It is possible that the previous lender did not file and record a release after the property had been paid off. This is a problem with the title and should be taken care of before the property is purchased. 
Regardless what type of lien your future property could have, the buyer should not have to investigate possible liens to the property on their own. Let the professionals handle it! At Arrowhead Title, we believe that accuracy matters, and we can help ensure your property title is free and clear BEFORE your purchase it.

Record Error or Forgery
Sometimes clerical errors happen. It is possible that something on the property deed was recorded incorrectly. For example, the amount of land that the property comes with and what is advertised could be different. If there was an error made when it was recorded, you could have an issue. If you do not catch this mistake before you buy the property, you could be paying for land that the title does not include. It is also possible there are some documents that were forged. It seems unlikely, but trust us it happens.

Don't risk buying a piece of property that has a defective title. Having title insurance is important and can help ensure there are no defects in your future property title. When you find the perfect property and you are ready to purchase it, contact the Lake of the Ozarks best title company, Arrowhead Title!

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Lake Ozark, MO 65049


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