When purchasing real estate in New Hampshire, it is important to be aware of potential title issues that could arise during the transaction process.
These issues can complicate the transfer of ownership. Sometimes, they even lead to legal disputes down the line.
Chain of title
One common title issue is a break in the chain of title. This occurs when there is a gap or inconsistency in the recorded ownership history of the property. Verify that the chain of title is clear and unbroken to ensure that you are purchasing the property from the rightful owner. In Manchester, the median age of real estate is 57 years old. That is enough time for a property to experience many owners.
Encumbrances
Another potential issue is the presence of encumbrances on the property’s title. These can include liens, easements or restrictive covenants that limit the use of the property. Liens, in particular, can pose significant challenges, as they represent legal claims against the property for unpaid debts or obligations.
Boundary disputes
Boundary disputes can arise when there is uncertainty or disagreement about the precise location of property lines. This can occur due to inaccurate surveys or conflicting legal descriptions. Resolving boundary disputes can be complex.
Unrecorded documents
Not all documents affecting the property may show up in public records. Unrecorded documents, such as undisclosed easements or agreements, can create unexpected claims against the property. A thorough title search can help uncover any potential hidden issues.
Title defects
Title defects can result from errors or omissions in the title documentation. These can include misspelled names, inaccurate legal descriptions or improper recording of deeds. Identifying and rectifying title defects before completing the transaction is important for avoiding future complications.
Title insurance
One way to mitigate the risks associated with title issues is to purchase title insurance. Title insurance policies provide coverage against losses arising from defects in the title. While title insurance can add to the upfront costs of purchasing real estate, it can offer valuable protection and peace of mind.
By conducting thorough due diligence and obtaining appropriate safeguards, buyers can help ensure a smooth and secure transaction.