When it comes to real estate transactions in Tennessee, a clear title is essential to ensure that the buyer is purchasing a property without any hidden legal issues. Title issues can arise for a variety of reasons, including disputes over ownership, unpaid liens, or missing documentation.
What is a title in real estate?
A title is the legal right to own and use a property. In real estate transactions, the title must be transferred from the seller to the buyer to complete the sale. The title includes a record of ownership, including all previous owners, liens, mortgages, and any other encumbrances or claims against the property.
Common title issues in Tennessee real estate transactions
Several types of title issues can arise during a real estate transaction in Tennessee:
- Unpaid liens: A lien is a legal claim against the property for unpaid debts, such as mortgages, unpaid taxes, or contractor payments.
- Title defects: Title defects occur when there is a mistake or problem in the chain of ownership.
- Ownership disputes: Sometimes, multiple parties may claim ownership of a property, especially if the title was not properly transferred or recorded in the past.
- Easements and encroachments: An easement is a legal right for someone to use part of the property for a specific purpose, such as access to a neighboring property. Similarly, encroachments (such as a neighbor’s fence being placed on your land) can cause title issues.
- Missing heirs or heirs with unknown claims: If there are deceased owners or missing heirs who never officially transferred their portion of the property, it can cause issues with the title transfer process.
How Tennessee handles title issues
In Tennessee, a title search is conducted to review the property’s history and ensure that the title is free from claims or defects. The title company will search public records to identify any existing liens, unpaid debts, or potential ownership disputes.
If title issues are found during the search, they must be resolved before the transaction can proceed. This might involve paying off unpaid liens, correcting errors in the public record, or resolving disputes between owners. In some cases, it may be necessary to work with a real estate attorney or title company to clear the issues before closing the sale.