Unfortunately, title and deed issues are still a widespread factor impacting real estate sales and ownership in the US, and Florida. What do you need to know if you are buying, selling, or brokering property?
Clouds in the Sunshine State
The credit and foreclosure crisis wreaked havoc on Florida. Those issues aren’t over. DistressedPro and ATTOM Data Solutions reveal that America is still suffering a hangover from 2008. This is showing up in ongoing foreclosures, but also in the flaws it has created on the titles of millions of homes nationwide. Being one of the hardest hit states, Florida certainly still has a lot of healing to do.
What we are talking about here is the fact that many chains of title to properties have issues. There may be problems with the way properties were foreclosed on, seized, and resold over the last 11 years. Then there is the real estate fraud epidemic which has infected many titles in various ways. There may be questions over who really owns rights to real estate, who has the authority to sell, and what debts need to be paid off in a transfer. Parties in the transaction may or may not be aware of these challenges.
What’s the Problem?
A variety of issues are showing up. Past liens and debts may not have been paid off. Previous owners may not have all signed off on transfers. Rights, like water access or boundaries may have changed.
Unless these questions are solved and are appropriately covered by title insurance in a sale, the new owner may not have the asset, equity, or ownership rights they believe they do. Sales agreements may fall apart prior to closing if new buyers can’t get title insurance or financing. Then there is always the possibility of real estate brokers having to deal with having sold flawed units. If that doesn’t become a major financial and legal liability, it may at least impact reputation and business operations.
These issues are definitely showing up in auction properties, distressed sales, and flips. However, they can affect anyone.
In Part 2 of this series we’ll cover how to know if a property you are selling, buying, or listing may have title flaws. Then in Part 3 we’ll tackle how to buy, sell, and broker safely and profitably, with confidence.