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Defects in deeds can lead to disaster

| Dec 18, 2020 | Real Estate

We tend to think about property as things that are owned by people, but the law regards property as a set of rights people have over things. If you have the deed to a piece of real estate, it shows you have title to that property, meaning that you have all the rights that come with ownership. By the same token, if you don’t have the deed, you don’t have the rights that come with ownership.

This is why defects in a deed can create major problems in the buying, selling and continued ownership of real estate.

Small errors on deeds

Some of the most common defects in deeds involve small, human errors. For instance, the deed may contain an incorrect date or a small error in its metes and bounds description of where the property stands. As long as these mistakes don’t materially change the property rights involved, courts generally treat these as harmless errors.

Another common error that is more serious occurs when a deed lacks a witness. Generally, this type of defect is considered resolved, or “cured,” once a certain period of time has passed. For some types of issues, the period is five years. For others, it is seven years.

Resolving bigger problems

Serious defects in deeds can mean the law won’t recognize a transfer of title. These can come about for many reasons. Some of these defects are harder to resolve than others, but none are particularly easy to fix.

One common method of resolving serious defects in a deed is by creating a new deed. This is sometimes known as making a corrective deed. Often, this can solve the problem. Unfortunately, a corrective deed can also create new trouble.

For instance, owners sometimes seek to correct a defective deed by simply fixing the errors and re-recording the deed. However, if they don’t do this correctly, a re-recording of the deed may accomplish nothing, or even make the problem harder to resolve. Owners should seek out help from a skilled real estate attorney to make sure their plan to fix deed defects is really going to work.

Title insurance

As we have seen, defects in a deed can lead to complicated problems that are not easy to fix. Resolving these issues can be time-consuming and expensive.

Perhaps the best way for buyers and lenders to protect themselves from defective deed issues is through purchasing title insurance. This will help make sure that the parties are prepared to deal with the costs of resolving any deed problems.