Finding a title problem after buying a home can be unsettling. You thought closing settled your ownership. A title defect may involve a lien, ownership claim, recording error, easement or another issue affecting your rights. What happens next depends on the type of defect and whether your title insurance policy covers it.
Determine what the title problem involves
Not every title issue has the same solution. You may find competing ownership claims, unpaid liens or other issues affecting the property. You may be able to correct some problems by obtaining or recording the right documents. Others may require you to negotiate or take legal action to confirm ownership.
The Florida Department of Financial Services explains that title insurance can protect an owner against loss or damage from covered title defects. These may include prior mortgages, judgment liens, tax liens and easements. Policies also contain exclusions, so the specific policy matters.
Does title insurance cover the problem?
If you purchased an owner’s title insurance policy, review it before assuming the claim is covered. An owner’s policy protects your interest. A lender’s policy generally protects only the lender. The Florida Bar notes that coverage depends on the policy’s terms, coverage amount and exceptions.
If the defect may fall within your coverage, notify the title insurer and provide the requested closing and property records. Do not assume a title problem is covered or excluded until you review the policy.
What if you do not have coverage?
Without an owner’s policy, you may need to address the title problem directly. In some cases, that could involve correcting public records, resolving a competing claim or pursuing legal action.
Keep your deed, title commitment, closing documents and any title insurance policy. These records can help determine what happened and what options may be available.
Resolving a title defect
A title defect can become more complicated when ownership, liens or other property rights are disputed. Reviewing the title records and closing documents early can help identify the appropriate next step. A real estate attorney can review those records and assess your options. Getting legal advice early can help you take the right steps to protect your ownership interest.
