Are There Problems a Title Search Cannot Reveal?
Are title searches foolproof? No matter how thorough the title search is performed, certain hazards and problems can arise, which a title search cannot find.
It is in these cases title insurance kicks in. Title insurance basically protects a buyer against anything not found during the title search.
Here are some of the problems a title search may not be able to reveal:
Mistakes in Legal Documents
All records on the property in question should be available through your local Public Records Office. If any mistake was made on a record, like a misspelled name, or if any documents are missing, it could slip through the title search and come up later. Title insurance protects against any damages from these mistakes.
If a seller, or buyer, works under any kind of alias or fictitious name, it could be detrimental to closing. A title search may not reveal fraudulence if the perpetrator has provided convincing forged documents, but title insurance will protect you from damages.
Similar to fraudulence, forgery is a common problem that holds up and can prevent closing. One of the most common forms of forgery involves divorced spouses. One spouse will forge their counterparts signature, in an effort to market real assets without the others knowledge. This is illegal and is covered under most title insurance plans.
If there is a lost heir that is not disclosed to the title company, and that heir surfaces later, title insurance will protect against this. Sometimes sellers will knowingly attempt to cut out other heirs, and other times the heir is so long lost that a title search could not discover them.
A lien is a claim put against a property, and can hold up a closing until it is resolved. One of the most common liens is called a mechanic’s lien and it results from when a contractor (or anyone that made improvements on the property) was not paid. A title search should discover all liens against a property, but occasionally some slip through the cracks. Title insurance protects you from having to pay off the lien.
If you have any questions about title searches or insurance, or any closing service for that matter, please do not hesitate to give us a call at (1-877-TITLE-30). Our Maryland title experts at Armour Settlement Services will be happy to answer any questions you may have.