There are many title issues that could cause problems for a buyer or may even cause the buyer to lose their home. Even a careful title search would not discover certain hidden risks and the buyer may not know about those problems until years later.
Here are a few issues that occur most frequently:
- Forged deeds, mortgages or releases of mortgages.
- Deed by a person who is mentally incompetent.
- Deed by a minor.
- Deed from a corporation given under a falsified resolution or not authorized by the corporate bylaws.
- Deed from a partnership that is not authorized by the partnership agreement.
- Deed from a trustee that is not allowed by the trust agreement.
- Deed challenged as being given under fraud, undue influence or duress.
- Deed following a non-judicial foreclosure, where the proper procedure was not followed.
- Deed executed under a falsified power of attorney.
- Deed executed under an expired power of attorney.
- Deed conveying property of a deceased person, not joined by all of the heirs.
- Conveyance by an heir or survivor of a joint estate, who murdered the decedent.
Some of these issues could be prevented by a diligent review of documents presented by the seller (for example: making sure a trust agreement allows the trustee to convey real estate), but many could not be discovered until someone comes forward at a later date making a claim to the property. A buyer should always consult with a reputable attorney or title company before purchasing real estate, to discuss the potential risks the buyer may encounter if they choose to not purchase a title policy.