5 Title Issues That Could Delay Your California Home Sale

Selling a home in California can be an exciting yet complex process. One of the most common hurdles sellers face involves title issues that can unexpectedly delay or even derail a sale. Understanding these potential problems before listing your property can save time, money, and stress. This post highlights five common title issues that could slow down your California home sale and offers practical tips to address them.

1. Unresolved Liens on the Property

A lien is a legal claim against property that may arise from obligations such as unpaid property taxes, contractor claims, judgments, or mortgage loans. Depending on the circumstances, an unresolved lien may need to be addressed before a real estate transaction can close or before a buyer can receive clear title.

For example, if a contractor records a mechanic's lien for allegedly unpaid work, the title company may require the lien to be released, bonded around, or otherwise resolved before it will insure the transaction without exception. Because each situation is unique, sellers should consider obtaining a preliminary title report early in the transaction to identify any potential title issues and work with the appropriate professionals, such as their title company, lender, or attorney, to evaluate available options.

2. Errors in the Property Deed

Errors in a recorded deed can create questions about ownership or the property's legal description. Common issues include misspelled names, inaccurate legal descriptions, omitted signatures, or other drafting errors. Depending on the nature of the error, these issues may need to be addressed before a transaction can proceed or before a title company will insure title without exception.

3. Unknown Heirs or Missing Signatures

Ownership issues can arise when property has been inherited or is owned by multiple individuals. In some situations, questions regarding ownership, unresolved probate matters, trust administration, or the interests of co-owners may need to be resolved before a transaction can move forward or before a title company will insure title without exception.

For example, if title to an inherited property was never properly transferred following the owner's death, the title company may identify the issue during its review. Similarly, when multiple individuals hold title to a property, the participation of all required owners may be necessary to complete the transaction. Property owners should consider reviewing the property's title early and gathering any documents needed to establish ownership before listing the property for sale.

4. Boundary Disputes and Easements

Boundary questions and easement issues can complicate a real estate transaction. An easement grants certain rights to use a portion of a property for a specific purpose, such as utility access, ingress and egress, or shared driveways. Depending on the circumstances, questions regarding property boundaries or easement rights may affect a buyer's willingness to proceed or a title company's ability to insure title without exception.

For example, neighboring property owners may have differing views regarding the location of a boundary line or the scope of an easement. Resolving these issues may involve reviewing recorded documents, obtaining a survey, negotiating with neighboring property owners, or, in some cases, pursuing legal action. Because these matters can take time to resolve, property owners should consider reviewing available surveys, recorded easements, and other title documents early in the transaction and discuss any known concerns with their real estate professionals or legal counsel.

5. Outstanding Property Taxes or Assessments

Delinquent property taxes and certain special assessments can affect title to real property. In California, unpaid property taxes generally become a lien against the property, and outstanding taxes or assessments may need to be addressed before or as part of the closing process to allow the transaction to proceed.

For example, if a property owner has delinquent property taxes or unpaid assessments for local improvements, the title company may identify those obligations during its review. In many transactions, these amounts are paid through escrow at closing. Property owners may benefit from reviewing their tax status early in the transaction and working with the title company, escrow holder, lender, or an attorney, as appropriate, to determine how any outstanding obligations will be handled.

Addressing title issues early in your California home sale can prevent costly delays and make the transaction smoother for everyone involved.

The information provided herein is for general interest only and should not be relied upon or construed as legal advice.