What is a title defect?
Title defects are any claims or other factors that could cause the title to a property to be declared invalid. Sometimes referred to as a cloud on title, the title defect can be any one of a wide range of issues that cause the current title to be called into question. Examples of a title defect range from simple wording that does not comply with standards in place at the time of the issue of the title to the discovery of other claims on the property that were not acknowledged at the time the deed was issued. Ideally, any title for property issued within a jurisdiction will comply fully with local laws. This means that all claims to the property are filed with the local government office that is responsible for maintaining property records. Depending on the location, this may be a registrar’s office, a probate office, or a recorder’s office. The claim information must be kept current in order to prevent the potential for a title defect. For example, if a lien is paid in full and dischar
A title defect is anything in the past ownership of a piece of real estate that may interfere with the owner’s right to “peaceful enjoyment” of the property or that may cause the owner’s loss to any portion of the property. While a title search will disclose title defects revealed by public records, there are other risks covered by title insurance that would not be discovered by a title search, such as: • Misfiling or improper indexing of recorded documents. • Forgeries or false impersonation of those executing documents. • Secret marriages or misrepresentation or fraud as to actual marital status. • Undisclosed heirs or children born after execution of a will, or deed delivery after death. • Execution of documents under fraud, duress or undue influence. • Confusion as to same or similar names. • Lack of capacity (legal age or mental competency) of a grantor.
