Thursday, June 30, 2016

70+ Ways To Lose Your Real Estate Due To Unknown/Undisclosed Title Defects: Hidden Hazards & The Need For Title Insurance Protection

From a reference article put out by the title insurance underwriter First American Title:
  • A forgery 50 years ago; a deed executed under duress; bigamy that went unknown; an error by a clerk in the county recorder’s office; a misapplied tax payment— these are but a few of the hidden “title defects” that could cause you to lose your property. And, even if you don’t lose your property altogether, title problems could make it impossible for you to sell.

    You don’t want a problem that occurred long before you bought your property to deprive you of ownership or your right to use or dispose of it. And you don’t want to pay the potentially high cost of defending your property rights in court.

    An Owner’s Policy of title insurance is your best protection against potential defects that can remain hidden despite the search of public records. A Loan Policy of title insurance also exists to protect your mortgage lender’s interest.
    -------------------------------
Among the more than 70 hidden hazards that a title insurance policy provides protection against are:
  1. Forged deeds, mortgages, satisfactions, or releases
  2. Deed by person who is insane or mentally incompetent
  3. Deed by minor (may be disavowed)
  4. Deed from corporation, unauthorized under corporate by-laws or given under falsified corporate resolution
  5. Deed challenged as being given under fraud, undue influence, or duress
  6. Deed following nonjudicial foreclosure, where required procedure was not followed
  7. Deed affecting land in judicial proceedings (bankruptcy, receivership, probate, conservatorship, dissolution of marriage) unauthorized by court
  8. Deed following judicial proceedings subject to appeal or further court order
  9. Deed following judicial proceedings where all necessary parties were not joined
  10. Lack of jurisdiction over persons or property in judicial proceedings
  11. Deed signed by mistake (grantor did not know what was signed)
  12. Deed executed under falsified power of attorney
  13. Deed executed under expired power of attorney (death, disability, or insanity of principal)
  14. Deed apparently valid, but actually delivered after death of grantor or grantee, or without consent of grantor
  15. Deed affecting property purported to be separate property of grantor, which is in fact community or jointly owned property
  16. Undisclosed divorce of one who conveys as sole heir of a deceased former spouse
  17. Deed affecting property of deceased person, not joining all heirs
  18. Conveyance void as in violation of public policy (payment of gambling debt, payment for contract to commit crime, or conveyance made in restraint of trade)
  19. Deed to land including “wetlands” subject to public trust (vesting title in government to protect public interest in navigation, commerce, fishing, and recreation)
  20. Deed from government entity, vulnerable to challenge as unauthorized or unlawful
  21. Ineffective release of prior satisfied mortgage due to acquisition of note by bona-fide purchaser (without notice of satisfaction)
  22. Ineffective release of prior satisfied mortgage due to bankruptcy of creditor prior to recording of release (avoiding powers in bankruptcy)
  23. Ineffective release of prior mortgage or lien, as fraudulently obtained by predecessor in title
  24. Disputed release of prior mortgage or lien, as given under mistake or misunderstanding
  25. Ineffective subordination agreement causing junior interest to be reinstated to priority
  26. Deed recorded but not properly indexed so as to be locatable in the land records
  27. Defective acknowledgment due to lack of authority of notary (acknowledgment taken before commission or after expiration of commission)
  28. Forged notarization or witness acknowledgment
  29. Deed not properly recorded (wrong county, missing pages or other contents, or without required payment)
  30. Deed from grantor who is claimed to have acquired title through fraud upon creditors of a prior owner

    And extended coverage may be requested to protect against such additional defects as:
    .
  31. Deed to a purchaser from one who has previously sold or leased the same land to a third party under an unrecorded contract, where the third party is in possession of the premises
  32. Claimed prescriptive rights, not of record and not disclosed by survey
  33. Physical location of easement (underground pipe or sewer line) which does not conform with easement of record
  34. Deed to land with improvements encroaching upon land of another
  35. Incorrect survey (misstating location, dimensions, area easements, or improvements upon land)
  36. “Mechanics’ lien” claims (securing payment of contractors and material suppliers for improvements) which may attach without recorded notice
  37. Federal estate or state inheritance tax liens (may attach without recorded notice)
  38. Preexisting violation of subdivision mapping laws*
  39. Preexisting violation of zoning ordinances*
For the rest of at least 70 hidden hazards for which title insurance provides protection, see: 70+ Ways to Lose Your Property.

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