The title to a property is, in essence, ownership rights. Many people confuse titles and deeds, but while the deed is official documentation of who owns a piece of real property, a title is the legal right of ownership.
When purchasing a new home, you will receive title to the property, but physically you will only obtain the deed.
In most residential closings in McHenry and Lake County, Illinois, the Buyer usually does not leave the closing table with the original deed. The title company usually provides the Buyer with a copy of the deed and keeps the original for recording.
Once the title company records the original deed, they usually send the original deed to the Buyer or their attorney.
There are a lot of scams capitalizing on confusion over this issue. If you purchase a property and you receive any sort of advertisement or invoice for a certified copy of your deed, it is best to check with a local real estate attorney to see if you actually need a certified copy of your deed.
If there is a problem with your ownership of the property, sometimes called a title dispute, your first line of defense is usually title insurance.
If you are selling the house and you purchase title insurance for the Buyer, you may be protected from getting sued for some title disputes.
What is a title dispute?
A title dispute is any disagreement over who owns a certain property.
This disagreement may arise when neighbors argue over the location of a boundary, or if a new heir to the property comes forward to claim it.
Common Kinds of Title Disputes
There are many kinds of title disputes, including:
- Boundary issues—Most property owners don’t know the exact boundaries of their property because they rely on fencing or roads to mark the edges. Although they may have been shown a survey, it is possible that the survey could be flawed. This is especially problematic when a conflict arises with a neighbor.
- Errors in the public record—It is not uncommon to discover clerical errors in the deed or survey of a property. It may take weeks, months, or even years to untangle public record errors.
- Unknown liens—It is possible that a previous owner may have had a tax lien, mortgage or judgment placed on the property that was not properly recorded. If this lien is still in effect, then another party may have a claim to the property.
- Missing heirs—If the property you purchased had an owner with unknown or missing heirs, then those heirs may have a stronger right to the title. In some cases, family members with some claim to the property may contest the previous owner’s will, bringing into dispute your present title.
- Illegal deeds—If the chain of title includes a deed made by an illegal party like a minor, person of unsound mind or any other fraudulent status, it could call into question the validity of your current title.
- False impersonation—If at some point your property was “owned” by someone who claimed to be the authentic title holder but did not actually possess the title, then every owner after that impersonator may not have held the title to the property.
- Undiscovered will—If a property owner passes away with no apparent heirs, then the property goes to the state which may sell it. However, if a will does surface at a later date, then anyone who purchased the property may not have a valid claim to the title.
- Unknown easement—An easement grants another party access to your property including right of way or water access. If the previous owner of the property did not disclose an easement, and you do not want to honor the easement, then it may become an issue for the courts.
- Bankruptcy of the previous owner—If a prior owner of the property declared bankruptcy it may cloud the issue of ownership. If these issues are not resolved at the time of purchase, they may confuse the issue of who possesses the title.
Contact Diamond Real Estate Law
The good news is that many of these disputes can be covered by having title insurance when you purchase the property or providing title insurance when you sell the property.
When you hire a local real estate attorney to help you with the purchase or sale of your home, the attorney can help you understand what type of title insurance is available and how it can benefit you.
Our attorneys at Diamond Real Estate Law have more than 15 years of experience helping clients navigate the selling and buying process. Rely on one of McHenry’s most respected real estate law firms to guide you through the complicated process of buying or selling your home. Contact us today for a free consultation.
DISCLAIMER: Any information contained herein is solely for informational purposes. While it is important that you educate yourself, nothing herein should be construed as legal advice or create an attorney-client relationship. For specific questions, I always urge you to contact a local attorney for advice pertaining to your specific legal needs.