Purchasing real estate in California requires a careful review of the property’s title history to avoid a variety of potential problems. Mortgage lenders usually require title insurance to finance a purchase. Title insurance companies will conduct their own review of the title history, but they do so to protect their own interests, rather than the buyer’s. The title insurer will notify the lender and purchaser of known or potential title defects that they will not cover, meaning that the purchaser could still be liable for some problems. It is in the best interest of every California real estate investor to research and investigate the property’s history. The following is a list of a few issues that might appear in a property’s title history.
Errors and Omissions
Clerical and filing errors can have serious repercussions for real property. A deed that incorrectly identifies the boundaries of a property, such as by leaving some portion of the property out of the legal description, can result in the loss of ownership of that part of the property. Other common errors include misspelled names of grantors or grantees, omission of legally required language in a deed, and misfiling of records.
Unknown or Missing Heirs
The general rule in the U.S., based on English common law, is that a grant of land is intended to be in perpetuity unless a deed specifies otherwise. The language used often states that the property is granted to the grantee “and their heirs.” If a previous owner of real property died, and the executor of their estate failed to locate or notify all of the owner’s heirs, those heirs could have a valid claim to some or all of the property, even years later.