Clouds over the header: why header defects cause latency



What kinds of problems are clouds or defects?

Almost every home has some kind of obstacle on it, from easements to primary mortgage on house. But these are not the kinds of encumbrances that cause problems with title searches.

Liens are the most common types of property rights problems that arise from search by title… The bond follows the property, not the debtor, so if you buy a house with a lien, you are liable for that debt as soon as the ownership passes to you.

If an initial title search reveals a problem, the title issuer will have to do more research. This can cause your lender to postpone closing your home.

Tax liens

Withholding occurs when a homeowner does not pay taxes and the government seizes his property. The house serves as collateral for the debt, and if the tax bill is not paid, the government can seize the property. If a tax withholding is found during a title search, the title company will conduct further investigations to determine if the debt remains outstanding.

If the seller has paid or will pay the overdue tax invoice

In most cases, if a tax lien is found on a property, it is because the invoice has been paid but the withholding has never been cleared. In this case, the seller can withdraw the deposit by presenting proof of payment. But even if this tax bill has not been paid, the seller can remove the bond from the proceeds from the sale of the house.

If the seller cannot or will not pay

If the seller is unwilling or unable to pay the withholding tax, you may have other options. If your contract of sale includes title contingencies, you have the option to opt out of the sale by keeping a deposit.

But if you still want to buy a house, you can pay the tax bill and withdraw the deposit yourself. However, if there is no contingency title and you decide to leave home, you will lose your deposit.


Any easements on property must be known to potential buyers early in the selling process through disclosure by the seller forms. An easement means that the seller owns the property right, but another natural or legal person has the right to use the property. Comfort conditions exist in most properties, but some can place severe restrictions on what you can or cannot do with your property.

Mechanic’s pledge

The mechanic’s bond is usually presented by a contractor or supplier who has never received payment for the work they did on the site. By placing a mechanic’s bond on the property, the seller cannot sell the house until the bond is paid.

When a mechanic’s lien is found on a property, in many cases that underlying debt may have already been paid. However, don’t think that you can ignore the old Notice of Intent. In most states, mechanic retention laws largely favor the unpaid worker, and the requirement will follow property.


Old unpaid mortgages can cause problems when searching by title. However, if the seller keeps title insurance from the moment they bought the property, this could cover the costs of a previously unknown lien.

Unpaid HOA fees

IN homeowners association can seize the property if the owner does not pay HOA fees… And if the seller doesn’t pay their fees, but sells the property before the lien took effect, subsequent owners will be liable for the unpaid balance.


When you buy a home, there can be a lapse of time between the signing of the real estate agreement and the actual closure. What happens if the salesperson passes away during this time?

It really depends on the circumstances and who gets the title after the seller’s death. Let’s take a look at a few different scenarios.

If the seller had a spouse or other joint tenant

If the seller had a spouse or other joint tenant with inheritance rights, this means that property rights are transferred to this person after death. The sale can proceed without delay.

If the seller died by will

If the property is subject to a will, you will have to wait until the will is made before completing the purchase of the property. The good news is that a sale is considered a binding contract if the seller accepted your offer of property prior to his death. This means that your contractual rights will prevail over any claims of the estate’s heirs, but there may be a long delay.

If the seller owned the property through a live trust

If the seller owned the property through a living trust and has not yet removed it from the trust in preparation for the sale, ownership will pass to the beneficiaries of the trust. And if the new owners do not want to continue selling, buyers will have to leave empty-handed.


If a title search reveals that any legal action is being taken against the property, the sale will usually end. In theory, buyers could pay in cash and proceed with the sale. But they won’t be able to write down the title if the trial doesn’t go exactly as they hoped. And this is a risky game that shouldn’t be played.

Ownership claims

The title chain refers to history own… This is what allows the title companies to clearly track ownership from one owner to the next. But during a title search, claims may arise from parties who believe that their property rights have been unlawfully deprived of property rights for various reasons.


If the seller is divorced and the spouse’s name still appears on the document, cessation act will need to file to remove the spouse’s name and clear the cloud.


Source link