How can a land title become unreliable? How to protect yourself from the biggest problem of all: buying a house without having the legal right to do so? Well, first we have to clarify a very important aspect.

The transfer of a property title in the US does not necessarily require the presence of a notary public or an attorney. You can write the deed yourself and then the buyer can keep it in their safe without registering it with the county court and take it out later when the time is right.

This fact introduces an “empty spot” in the chain of titles and later when we try to sell the house and the new buyer requests a title search, we find that there is an empty spot and therefore the title is not valid. “marketable”, as they call it in technical jargon.

Before buying a home, it is always advisable to hire a title company, which is a company that will do a thorough investigation on the title to make sure there are no gaps in it. The title company will give us a statement that the title is marketable and there are no liens on the property. They will also issue title insurance as security for the investigative work the title company has done.

But be careful, title insurance covers only errors made by the title company in researching official records. So, let’s say the title company has missed a link that was present and recorded before the search. And let’s say such a link reduces the value of the house we want to sell. We can use title insurance to cover the costs of removing that lien.

But title insurance won’t cover any valid, unregistered deeds that someone has kept in their safe. So let’s say the seller sells the house twice: first to a relative who gets a deed directly from the seller and doesn’t register it, and then to you, through a title company. You buy the house right and after a while the relative comes to you with his deed and shows that it was signed and notarized before you bought the house. This invalidates your deed and you will need to hire a lawyer to fix the problem, but it may not be covered by title insurance at all.

Therefore, it is always good to read the title insurance contract and verify any exclusions of coverage. Or better yet, you may want to have a consultant who can help you verify this and make sure you’re really covered: it could be your real estate agent or a lawyer or even your title company, if you have a very trusting relationship with them. . .

roberto mazzoni