Common Title Defects in New York Real Estate

A title defect can be a serious impediment to real estate transfers. The existence of a title defect means the property could be owned or otherwise encumbered by another person. Therefore, the seller, lender, auctioneer or transferor with a defective title to property actually doesn’t have a good marketable title.

What is the Effect of a Title Defect on My Property?

The effect of a title defect is that it obscures true ownership. It becomes difficult to know who the real owner of a property is. This is why it is sometimes referred to as a “clouded title” because you can’t clearly “see” the true owner.

As a real estate buyer or investor, you want to acquire a property with good title. You want to be sure no one other than the seller or lender has a claim on the property. The last thing you want is for your title to be declared invalid because of a defect that has been discovered after the sale. This is why it is absolutely crucial to include a New York real estate attorney whenever you are buying real estate.

What are the Common Title Defects to New York Real Estate?

Title defects can be particularly difficult to spot even for the most prudent of buyers. Some may remain hidden years after a sale has occurred, only to be discovered when you’ve developed the land. Do not be caught unawares.

Here are some common forms of title defects:

1. Public record errors Clerical errors or errors made during filing can put in question the validity of a deed or survey. A public record error affecting your family home can be disconcerting, even devastating. In addition, fixing such errors could cause unnecessary financial strain.
2. Unsettled Liens Former property owners may not have settled all their debts or bills. Therefore, a bank or financial company may have a lien or claim over the property. Such liens continue to stay on a property even after a sale. Therefore, if you buy property subject to a lien, even though the debt was not your own, the bank or finance company can foreclose your property.

   Other liens to look out for include:
   > Judgment liens in favor of a creditor who won a court case
   > Tax liens in favor of the IRS for unpaid property taxes
   > Liens from mortgages and deeds of trust.

3. Unknown Easements An easement will give a neighboring property owner the right to use your property in a certain way, say to access a nearby road. Because it affects the use of property, if you buy a piece of property without prior knowledge of an easement, you will be frustrated by your neighbor’s overriding right.
4. Survey Or Boundary Disputes You may have seen the property being surveyed. However, other surveys may exist showing different boundaries. One or more of your neighbors may have a claim on your property.
5. Forgeries Forged documents may find their way to public records affecting the ownership rights of buyers or investors. Once discovered, they can jeopardize a buyer’s ownership rights.

Property buyers can protect themselves by having a New York real estate attorney perform due diligence before purchasing real estate properties. The real estate attorneys at Ianniello Andersen, P.C. can help. Serving clients in the Albany, Clifton Park, Glens Falls, Saratoga Springs, Troy, and the entire Northeastern NY areas at (518) 350.7755.