Buying a home is exciting! That is until a few surprise liens, a property line dispute (encroachments), or a few long-lost heirs pop up. These title issues (or title defects) can delay your closing, increase your costs, or even jeopardize your deal closing.
So, how do we navigate these possible hidden issues? A thorough title search usually does the trick. Like a time-traveling detective, a good title search can dig into a property’s past to uncover risks before they become your problem. Here’s how it works and why skipping one is a gamble no buyer should take.
By Hayley Baldinelli, J.D.
Table of Contents
1. Liens, The Invisible Debt That Sticks to Your Property
Liens are legal claims against a property for unpaid debts. Common types in Florida include:
- Contract liens – unpaid roofers, plumbers, etc.
- HOA/COA liens – missed dues or special assessments (more common with condos)
- IRS/tax liens – unpaid property or income taxes
A title examiner can uncover liens by:
- searching county court records for judgements
- reviewing mortgage payoff confirmation, and
- looking at ledgers for unpaid fees
Real Florida Example: A Sarasota buyer almost inherited a $18,000 lien from the seller’s unfinished pool renovation. The title search revealed this, forcing the seller to pay before closing.
2. Encroachments: When Property Lines Aren’t Where They Seem
An encroachment occurs when a structure, such as a fence or driveway, illegally crosses into a neighbor’s land or public space. This is more common in older neighborhoods where there are vague or hidden plats, and on coastal properties with shifting setbacks.
A title examiner will uncover these issues when comparing the property survey to legal descriptions and will flag unpermitted structures such as sheds that are over the property line.
3. Heirs & Missing Owners: The “Ghost” in the Chain of title
When a property owner dies without a will or trust, several heirs may claim ownership. This is inherently common in Florida because of its high population of the elderly. When this happens, the closing process comes to a halt and the property goes into probate. This can grossly delay your closing or kill your deal all together!
Pro tip: Agents, if a prospective client is selling their late father’s house, always ask about any other immediate family members. You can also notify the closing company so that they can investigate further. A good closing company will know about title issues related to probate. At Preferred Settlement Services, we have an attorney on staff to help with these issues.
To learn more about Probate, watch our webinar, Probate, Trusts, Guardianship, and Power of Attorney
Title searches can find these “ghost” owners by tracking probate court records for unresolved estates and by verifying all signatures on past deeds. After all, fraudulent transfers do happen.
Example: An Orlando investor lost 40% of their rental property’s value when two heirs emerged 5 years after the purchase was complete.
How to Protect Yourself
Never skip the title search! Get an owner’s title insurance policy. And always review the survey! Have specific questions on this topic? Call our office at (941) 376-9551