When a title search uncovers issues, it can be daunting. However, knowing what follows can help you feel less overwhelmed by the situation. Learn more about this with this post by Louisiana Title Services Inc. in Baton Rouge, LA.

You should never skip a title search when you’re buying a property. Doing so ensures you’re acquiring a home or land free of unexpected legal or financial baggage. However, not all title searches come back clean. If issues arise, they can potentially delay or even derail the sale. Here’s a look at what happens when a title search uncovers issues.

Note: This is a general guide. For specific advice, turn to a professional title services company or your home-buying team.

Call Louisiana Title Services Inc. in Baton Rouge, LA at (225) 769-2900 to find the helping hand you need for your complex real estate transactions.

What to Do if a Title Search Uncovers Issues

What Is a Title Search?

A title search is a thorough review of public records to verify the legal ownership of a property and to uncover any issues that might affect its sale. It ensures the property can be transferred to a new owner without future legal complications.

While a title search may feel like just another box to check in the buying process, it’s critical to avoid unexpected legal battles or financial burdens.

Common Issues Found During a Title Search

Several problems can surface during a title search, including:

1. Liens:
   These are claims against the property due to unpaid debts. Examples include:
2. Tax Liens: Unpaid property taxes owed to the local government.
3. Mechanic’s Liens: Debts owed to contractors or suppliers for work done on the property.
4. Judgment Liens: Claims resulting from court judgments, such as unpaid credit card debt or legal settlements.
5. Easements and Restrictions:
   Easements grant others the right to use a portion of the property for specific purposes, such as utility access or shared driveways. Restrictions might limit what the property can be used for, which could conflict with the buyer’s intended use.
6. Ownership Discrepancies:
   Issues with the chain of title may arise, such as missing documentation, forged signatures, or undisclosed heirs claiming ownership rights.
7. Boundary Disputes:
   Problems with property boundaries can occur if previous surveys conflict, or if neighboring properties encroach on the land in question.
8. Outstanding Mortgages:
   Occasionally, a previous mortgage or loan against the property may not have been properly cleared, leaving a cloud on the title.

Call Louisiana Title Services Inc. in Baton Rouge, LA at (225) 769-2900 to get peace of mind during your home-buying ventures.

Steps to Address Title Issues

If a title search uncovers issues, the next steps depend on the nature and severity of the issue.

Remember, this is general advice. Go to a professional team who can work out your specific situation.

1. Notification of the Problem

The title company or attorney conducting the search will inform the buyer, seller, and any relevant parties of the findings. They will provide details about the problem, its potential impact on the sale, and possible remedies.

2. Resolving Liens

Liens must typically be cleared before a property can change hands. The seller may need to:

• Pay off the debt in full.
• Negotiate a settlement with the creditor.
• Use proceeds from the sale to satisfy the lien at closing.

3. Addressing Easements and Restrictions

If easements or restrictions are discovered, the buyer has a few options:

• Accept the property as-is, understanding the limitations.
• Negotiate adjustments with the relevant parties (e.g., utility companies or neighbors).
• Back out of the deal if the restrictions are a dealbreaker.

4. Resolving Ownership Issues

Ownership discrepancies may require:

• Providing additional documentation to establish a clear chain of title.
• Filing legal actions to remove clouds on the title, such as quiet title lawsuits.
• Tracking down missing heirs or parties with a legal claim to the property.

5. Boundary and Survey Issues

Boundary disputes can be resolved by:

• Ordering a new property survey.
• Negotiating with neighbors to settle encroachments.
• Amending property descriptions in legal documents to clarify boundaries.

The Role of Title Insurance

Even when title issues are resolved, certain risks might remain. Title insurance provides protection for buyers and lenders against future claims or disputes related to the property’s title. For example:

• If an undisclosed heir emerges with a claim on the property, title insurance can cover legal costs and losses.
• If a previous lien resurfaces after closing, title insurance ensures you’re financially protected.

Having title insurance gives peace of mind, especially in cases where minor risks couldn’t be fully eliminated.

Potential Delays or Cancellations

Unresolved title issues can delay closing as parties work to address the problems. In some cases, buyers and sellers may negotiate an extension to resolve the matter. However, if the issue proves insurmountable or too costly to fix, the buyer may choose to back out of the deal entirely.

Call Louisiana Title Services Inc. in Baton Rouge, LA at (225) 769-2900 for professional title services that will help you have a safe and successful closing.