Having “valid title” to property means that a person or entity has the full, exclusive legal right to the use and ownership of a piece of property. There are a number of ways in which a title might be defective, meaning that some legal problem prevents a person from having full ownership of the property. Often, these problems are unknown or deliberately concealed at the time of purchase. If the title to a property is defective, a seller may need to initiate certain legal actions in order to clear the title or remedy title defects prior to effecting a proper sale. Continue reading to learn about title defects in Illinois, and call a knowledgeable Illinois residential and commercial real estate attorney for assistance with a matter of real estate law.
What is a Title Defect?
A title defect is any legal problem that gets in the way of a person from having full valid title to property. There might be a problem with ownership, there might be confusion around the property lines, or certain parties may have preexisting rights regarding use of the property of which the current owner was unaware. The error may be merely clerical (for example, a missing public record), or there might be a genuine dispute over the rights of different parties with regard to the property. Regardless, it’s vital to perform proper due diligence before purchasing real estate to ensure that valid title can actually be conveyed.
Common Title Problems
There are several common title defects that can plague real estate transactions. Common title issues include:
- Superior claims of ownership. A seller must identify and account for all parties who have an interest in a piece of property before conveyance. If a creditor has an interest in a property (for example, the mortgage-holder or another lender with a lien), the seller must pay off their debt before the buyer can purchase the property, or the creditor must otherwise be included in the transaction. Sometimes a property owner will take out a second mortgage without recording the mortgage, leading to confusion over who has rights to the property once sold.
- Missing or erroneous public records. Deeds must be properly recorded with the county, in addition to other public records pertaining to title. Mistakes may have been made at some point along the chain of title leading to missing or erroneous public records which can create uncertainty regarding property ownership, costing time and resources to fix.
- Mistakes in the deed. A deed must clearly and accurately describe the property and its boundaries. Often, the boundaries described in the deed will be unclear or leave out certain parts of the property. If some part of the property falls outside of the boundaries as described in the deed, it can create issues determining who actually owns that portion of the land. In addition to boundary problems, deeds can contain errors such as misspelled names of grantees and grantors, omission of legally required language, and other errors that can create legal complications.
- Unknown easements. An easement is a nonpossessory right to use certain portions of land–such as a government agency with the right to access a portion of private property in order to maintain power or sewer lines. Property owners can grant easements to neighbors and other parties, such as a limited right-of-way to cross the property, which can remain valid even after the property is sold.
- Fraud and forgery. In addition to mistakes and omissions, some deliberate fraud in the past may create a title defect. A party may have forged someone’s signature on the deed conveying the property in the past, for example, rendering that conveyance invalid. These types of defects can be hard to detect in advance.
It’s important to conduct your due diligence in advance of any real estate transaction to identify any potential title defects. If you are pursuing a real estate transaction, or you have identified a defect with your title, talk to a seasoned Illinois real estate attorney to discuss your options.
If you need legal assistance with an Illinois real estate matter, get experienced and educated legal help by contacting the Chicago residential and commercial real estate lawyers at Pluymert, MacDonald, Hargrove & Lee in Hoffman Estates at 847-310-0025 and in Des Plaines at 847-298-5030.