In any Florida real estate transaction, one of the most important steps before closing is confirming that the property has a clear and marketable title. A title search is conducted to review public records and verify which items are necessary for a seller to convey title to a buyer, free of issues, and to allow the closing agent to issue a title insurance policy after closing.
It is not uncommon for title issues to arise during the closing process (and this is when it matters who you close with). These problems can delay a transaction or, in some cases, prevent a sale from closing altogether. Understanding the most common title issues in Florida real estate and how they are resolved can help keep your transaction on track.
What Is a Title Search?
A title search examines the property’s ownership history and any recorded documents that could affect it. This includes deeds, mortgages, liens, court judgments, and other public records. If a problem appears during the title search, it typically must be resolved before closing can proceed.
Common Title Issues That Can Delay a Closing:
Some of the items below are typical “requirements” for closing; however, depending on the specific facts, they could be issues that delay or prevent your closing from happening. For example:
Outstanding Liens
Liens are one of the most common title issues. These may include unpaid property taxes, contractor liens, or court judgments against the seller. Because liens attach to the property itself, they usually must be satisfied before the property can transfer to a new owner.
Typically, these are not an issue when they belong to your seller, who anticipates paying them off at closing. However, when they belong to a prior owner or unrelated party, obtaining a release or resolving the issue could create issues for closing. These may include unreleased mortgages from prior owners, even if they have been paid off.
Errors in Public Records
Clerical mistakes in recorded documents, such as incorrect legal descriptions, misspelled names, or filing errors, can create title defects that must be corrected before the sale can move forward. This could include improperly drafted documents, missing vital information such as a spousal joinder, marital status, or non-homestead language.
Survey or Boundary Issues
A property survey may reveal boundary discrepancies, encroachments, or easements affecting the property. These issues sometimes require variances, vacations, or other documentation before closing to ensure a buyer is not inheriting an issue unexpectedly.
Protecting Your Real Estate Transaction
For most buyers and sellers, their real estate transaction is one of the largest financial transactions they will ever complete. Identifying issues early to ensure they can be resolved before closing is essential to ensure the property can be transferred without delay or the risk of inheriting issues that will need to be resolved in the future.
Working with an experienced real estate attorney during the closing process helps protect your investment and ensure a smooth closing.
As always, if you have any questions or concerns about title issues or title insurance, we recommend you contact your licensed and experienced Florida real estate attorney.
