What happens when there’s a claim against my home’s title?
When you buy a home and go through closing, there’s a sense of finality to the signing of all those documents. Once you’ve signed multiple copies of every form, initialed a bunch of pages and handed over the certified funds or wire receipt for your down payment, you own the home. The agent or seller gives you the keys, and you start living your life in your new space.
For most people, the story from there proceeds simply. Invest in fixing up and maintaining the property, enjoy a few years or decades there and then place the home on the market when it’s time to make a change. Occasionally, however, other issues arise. One day, there’s a knock on your door and you’re getting served with legal paperwork. It turns out that someone else owns your home, and your equity and place to live could be in jeopardy. What happens next?
Title claims are uncommon, but they do happen
Typically, title claims are the result of either intentional fraud or issues with the execution of an estate. In some cases, a trustee or executor cannot locate one or more intended heirs. The executor sells the home and distributes the proceeds, but then the heir shows up to stake his or her claim. Other times, people may create fraudulent deeds, commonly Quit Claim Deeds, to create a new chain of title and profit off of the sale of something they don’t own.
Quit Claim Deeds only give away or sell the owned interest by the person named on the deed. There is no implied warranty that the individual actually holds the title. Typically, these kinds of fraud are found in the title search and underwriting process, but occasionally they are not. A home could transfer several times, with each new transfer of deed illegitimate, before the real title holder steps forward to claim the home or land in question.
Real estate lawyers and title insurance can protect you
Real estate law and the transfer of title can be legally complex matters in Florida. In order to protect your investment, you should seek advice and advocacy as soon as possible when you become aware of a title issue. In some cases, if you have a good buyer’s title insurance policy, the policy will cover your attorney’s fees.
There are many situations where you may have chosen to go without a buyer’s policy. You may have brought the property in cash or with a huge down payment to avoid extra costs. Some lenders only require a lender’s policy and will let you waive your right to buy a buyer’s policy. In these scenarios, the lender gets reimbursed for the mortgage finances, but you could lose your equity in the home that you’ve built for years. The sooner you take steps to protect yourself, the better.