Title Defect Resolution
A title defect resolution refers to the process of identifying and correcting issues or flaws in the title of a property that may impede its transfer, ownership, or marketability. Title defects can arise from various sources, including clerical errors, unresolved liens, boundary disputes, or claims from third parties.
The resolution process typically involves several steps. First, a title search is conducted to uncover any existing defects in the title. This search reviews public records to assess the history of ownership and any encumbrances, such as mortgages or liens. If defects are found, they must be resolved before the property can be sold or transferred.
Common methods of resolving title defects include:
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Quiet Title Action: A legal proceeding in which the current owner seeks to establish clear ownership by eliminating any competing claims. For example, if a property has a claim against it due to an old mortgage that was never formally released, the owner might file a quiet title action to remove that claim.
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Title Insurance: Obtaining title insurance can protect against defects that were not discovered during the title search. If a defect arises after the purchase, the insurance can cover legal fees or damages related to the defect.
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Corrective Deeds: If a title defect is due to a clerical error, such as a misspelled name or incorrect property description, a corrective deed can be executed to amend the title.
Successfully resolving title defects is crucial, as it ensures that the property can be sold without legal complications and that the new owner has clear, marketable title, free of any unforeseen claims or disputes.
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