By Jeff Lender
When you’re searching for the house of your dreams, it pays to be discerning. You should look at a variety of properties in different locations until you find the one that’s perfect for you and your family. It can be a long process, but when you finally settle on the perfect home, all that work will be well worth it.
There can be many factors that rule out a property for you. It could be located in the wrong school district, or it could be too close to a noisy highway. It could need significant repairs, or it could have too many competing buyers driving up the price. These are all valid reasons to pass on a property, even if you love it, but there may be some others you haven’t thought about. Today, the team at World Wide Land Transfer has a few reasons you might want to say “no” to a property, and they’re all related to potential title defects.
In some cases, the results of a survey will reveal that the established property lines are incorrect. This could result in a property owner losing part of their property and having to move fences or other structures that are no longer located on their lot. While a mortgage lender will generally require a new survey to be conducted before they lend money for a real estate transaction, there are some situations where a property line issue could go undiscovered.
For example, a survey could be conducted on an adjoining property while you own it. In that situation, you would be required to cover the costs of moving any structures that violate the new property line. Although it can be difficult to predict a property line dispute, there could be some signs of potential future issues, like if a neighboring parcel of land has been sold to a land developer. They will likely be performing a thorough survey before subdividing that land, and it’s possible that could result in structures on your property encroaching on theirs. If you notice situations like this, you may want to reconsider buying that property or find a title insurance policy that will protect you.
An easement is an agreement that allows another party to use part of a property for specific purposes. For example, a neighboring property owner may be granted the right to use your driveway to gain access to their own property. Although the seller is legally required to disclose any existing easements to potential buyers, an easement will not prevent the property from being sold – as is the case with many other types of title defects. If you are looking at a home being sold with an easement, consider how it might affect you in the future and how much it might cost to resolve any associated legal issues that might come up.
As the new property owner, you will be bound to the terms of the easement, and if you can’t deal with that responsibility, it may be a good idea to walk away from the deal.
A restrictive covenant is another type of agreement that can affect how you use your property in the future, and unlike an easement, the seller is not legally required to disclose the covenant before the sale goes through. Restrictive covenants are usually not listed on the deed itself, but rather on a separate document. As the buyer, it is up to you to do your research if you want to be informed about a restrictive covenant.
A restrictive covenant could affect your ability to do many things. You could be forbidden from making additions to the home or from building certain structures on the property. You could even be restricted from changing the landscaping or paint colors, from building fences over a certain height, or from owning certain types of pets! The potential restrictions that could be imposed in a covenant are nearly limitless, so be sure you know what you’re getting into before you buy a property. If a restrictive covenant exists that will prevent you from using the property the way you want, it may be time to move on and find a property where you will have the freedom you desire.
All of the situations listed above are examples of title defects that can be covered by a standard or enhanced title insurance policy. So, while issues like these may give you pause when considering a property for sale, they don’t necessarily have to be dealbreakers.
Before you buy, a thorough title search will be conducted, and any title defects that come up will need to be resolved before the sale goes through. Once that happens, you can purchase a standard owner’s title insurance policy to cover many types of undiscovered title defects that originated in the past. In the case of potential future issues like property line disputes, an enhanced title policy can provide protection from financial losses from defects like boundary line disputes.
If you want to find out more about the title insurance coverage available to you, get in touch with the team at World Wide Land Transfer today! We can also provide a range of other title and escrow services for buyers, sellers, real estate agents, lenders, and more.
World Wide Land Transfer is a service-oriented PA title company with offices in Philadelphia, New York, New Jersey, Texas, Florida, and Washington, D.C. With a record of going above and beyond, we are trusted to close everything from complex commercial transactions to residential refinance and purchase transactions.
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