Title issues can be a real headache when purchasing property, especially in a bustling city like New York. Whether you’re buying your dream home or investing in real estate, understanding the most common title issues can save you time, money, and stress. Here are some of the top title issues you might encounter when buying property in NYC:

1. Liens

One of the most common title issues is liens placed on the property by creditors to secure debts. These could include unpaid taxes, contractor bills, sidewalk liens, mechanic liens, or outstanding mortgages. If not resolved before closing, these liens could become your responsibility as the new owner. Most of the time, these open liens are paid at closing. If there are any issues with outstanding liens, it can usually lead to delays in closing.

2. Errors in Public Records

Mistakes can happen, even in official records. Errors such as incorrect property boundaries, misspelled names, or inaccurate legal descriptions can lead to title disputes and delays in the closing process. This is not too common here, but it can come up and can create some delays in the process.

3. Easements

An easement gives someone else the right to use part of your property for a specific purpose, such as access to a neighboring property or utilities. While easements are often recorded in property documents, there may be undisclosed or unrecorded easements that could affect your property rights. Easements are very common in Brooklyn and although this can come up, it is not an issue that we see that often.

4. Encroachments

Encroachments occur when a structure or improvement on one property extends beyond its legal boundaries and onto neighboring property. These boundary disputes can arise from inaccurate surveys or the passage of time. This is a very common issue in Brooklyn. The most common issue we see is a fence that is placed outside of the boundary lines. If the encroachment is over 1 foot, then it can present a problem for the buyer and their title insurance. Many times these issues are resolved via an affidavit from the neighbor but that’s not always possible. Either way, this is something to be mindful of because it can come up, and it can cause delays in the closing process.

5. Unreleased Mortgages

Even after a mortgage has been paid off, the lender may fail to record the release of the mortgage, leaving a cloud on the title. Resolving unreleased mortgages requires obtaining documentation from the lender to prove that the debt has been satisfied. This is also a pretty common issue here in Brooklyn. Whenever this comes up, it usually leads to legwork needing to be done because proof of the mortgage payoff must be obtained and many times, the old lender is not in business anymore or the loan was transferred to another company. This can also cause delays in process.

6. Forged Documents

In some cases, fraudulent individuals may attempt to transfer property ownership using forged documents. It’s crucial to conduct thorough title searches to detect any signs of fraudulent activity. We don’t see this issue very often but it is definitely possible and if it does come up, it can present some very significant and serious issues.

7. Probate Issues

When a property owner passes away without a clear estate plan, the property may become tied up in probate proceedings. Resolving probate issues can be complex and may delay the transfer of ownership. Probate issues are pretty common as well, especially if someone who passed away previously did not have their estate probated properly. Many times we see this when two or more people held a property as tenants in common, then one person passed away and when they go to sell, the other owner finds out that the descendant’s ownership did not transfer to them because it belongs to his or her estate. This usually leads to a probate or administration proceeding needing to be done. There are other probate issues that can come up and in almost every case, it leads to delays because the probate courts in NYC typically take a while to go through.

8. Outstanding Judgments

If the previous owner was involved in legal disputes that resulted in judgments against them, those judgments could attach to the property and become the responsibility of the new owner. Usually these judgements will come up during the title search and they are typically resolved and paid by closing. If an attorney misses this then a homebuyer could end up inheriting a judgement but that is not something we have seen happen very often.

Navigating these title issues requires due diligence and assistance from experienced professionals, such as real estate attorneys and title insurance companies. Investing in comprehensive title insurance can provide added protection against unforeseen title defects, giving you peace of mind when purchasing property in Brooklyn. If you’re a homeowner, getting a pre-title search can help you get a heads up on potential title issues. Either way, this is why you need a good real estate team when buying or selling because if these issues come up, you need experienced professionals who can find solutions and keep the deal moving forward.

By understanding these common title issues and taking proactive steps to address them during the buying process, you can ensure a smoother transaction and get to the closing table with confidence 🙂