Today we’ll discuss title defects and title encumbrances and explain how they affect a title to real property. One of the first steps before any purchase is the title search, a process that uncovers problems associated with the title that may impair the buyer’s ownership rights. Title issues can be broken down into two camps: title defects and title encumbrances.
Common title defects include errors and omissions, mistakes in deed recording, incorrect marital status, and fraudulent signatures. Title defects can cause considerable problems. For instance, if the heir of a property conveys the property without opening an estate, who is to say that there were not other heirs that should have signed off? Working with a qualified PA title insurance company is the best method to resolve title defects prior to purchase and protect yourself from future ownership claims.
An encumbrance is a claim to real property made by someone other than the property owner. Common encumbrances include liens (the most common of which include mortgages and tax liens), deed restrictions (which restricts the uses of the
property), easements (which give third parties the right to access a property), and encroachments (which identify areas where a structure crosses over onto an adjacent property).
Judgment Liens: Do they Affect a Title?
If a property owner has been sued for a large sum of money and a court has entered a judgment against them, this creates a Judgment Lien. All Judgment Liens do not affect the title to real property, however. If the judgment is against the property (in rem), then it will affect the title. If it is against the individual (in personam), then it won’t affect your property. Common examples of in rem judgment liens include mortgage foreclosures, municipal liens, and code enforcement liens for property maintenance. A PA title company will examine a copy of the judgment in the county judgment book and determine the amount and whether it has been paid.
Curing Title Defects and Encumbrances
Encumbrances may be filed in many different places depending on the type of lien and where the real property is located. A title examination performed by a PA title company will identify any restrictions placed on a property and any title defects that could cloud the title.
World Wide Land Transfer is a full-service PA title insurance company backed by the largest and best-rated national underwriters. We provide title insurance, settlement services and escrow for simple residential transactions as well as complex commercial real estate transactions. Contact us today to learn more on how we can assist you in your transaction.
Did you know that the first title company in the United States was formed in Pennsylvania in 1853. The practice of insuring titles to real property also began in Pennsylvania after a Pennsylvania Supreme Court opinion in 1868. The industry has changed substantially since then, and World Wide Land Transfer, a full-service PA title company, has been part of that change. We provide not only title insurance for buyers and lenders, but also title examination, escrow, and settlement services for all forms of real estate transactions.