Advising Clients with Property Title Issues in Monmouth and Ocean County NJ
Read on to learn how the transfer of title can run up against roadblocks, and what you can do to resolve issues and move into your home, ready to begin your future.
Buying a house is a huge decision. It is not only a lengthy process that involves much back and forth in a highly competitive market, but it is also, for many, the biggest investment they will make in their lives. When you buy a home, you obviously want to make sure that all things are in order, and that the transfer of the deed will go smoothly.
What is the difference between a deed and a title?
A deed is the physical legal document stating ownership of the house. Whoever’s name is on the deed is the legal owner of the property. A title, on the other hand, is a person’s legal position regarding the home. A title to ownership of the property is necessary, especially when a loan has been obtained to purchase the property. This is because title insurance shows that you are the sole and rightful owner of the property, and there are no outstanding claims to the deed.
Because a deed transfers ownership of a property to the buyer, a contract that schedules that transfer upon having met contingencies is required in order for a buyer to obtain title insurance. Again, title insurance ensures that the deed does not have any outstanding mortgages or claims and that the transfer of the title of ownership will be clean. Title insurance is required to obtain a home loan, but it cannot be obtained if there are mistakes on the deed.
Chain of Title and Deed Mistakes
Before you seek title insurance, it is important to check the chain of title. This record shows the transfers of ownership since the property was first owned, and it will reveal any restrictions, easements, or outstanding claims or co-ownerships on the property. If there are outstanding title restrictions, you will need to address them before a lender will provide the home loan.
Deed mistakes are a more common issue than one would think. The title insurance issuing institution will check to ensure that there are no mistakes on a deed dating back to the property’s earliest deed transfers, which are part of the public record. If it finds a mistake, you could be stuck with incomplete title insurance. So what do you do if the title issuing institution finds a mistake in the deed, and you cannot obtain complete insurance that you are the sole owner of the property?
Correcting Deed Mistakes
Depending on the severity of the error, there are a couple of remedial practices one can take to fix errors on a deed and green light the home buying process. If the mistake in the deed is minor and clearly reflected in the public record, it can be corrected with a simple affidavit. This affidavit stating that the legal description of the property has an error can be drawn up by an attorney, a property surveyor, or the institution that prepared the original deed. Such an amendment to the original deed is called a Scrivener’s Affidavit. Because a Scrivener’s Affidavit simply clarifies that there was a mistake with the prior deed or deeds, in the case that such an affidavit is required, one can then move forward with receiving title insurance in full. When the title of ownership is transferred, an updated deed that corrects the problem will be issued.
If, however, the mistake to the deed is more complex, or it can’t be clearly traced in the public record, a Corrective Deed could be the necessary next step. A Corrective Deed does just that – it corrects prior issues regarding ownership of the property. In order for the Corrective Deed to be processed, all involved prior owners – people who have owned the property since there was a mistake on the deed – must sign a document so that the proper documents are able to be submitted into the public records. The Corrective Deed is a corrective measure that takes place before the transfer of ownership; it simply irons out the mistake to clear the path for the title transfer.
You can also check our related post on When is a title ordered?
Get in contact with a West Long Branch Seasoned Real Estate Law Firm
At Chamlin, Uliano & Walsh, our real estate attorneys are serving clients across Red Bank, Freehold, Long Branch, and Monmouth County in all aspects of home buying, ensuring that the process is smooth and legally viable.