10 Common Title Issues

Let’s start with the fact that issues are common on real estate transactions and can range from minor inconveniences to serious ownership risks. Lucky for you, we are in the business of protecting property rights and are here to help!

Now, what the heck even is a “title issue?” A title issue (or title cloud) refers to any problems with the ownership of a property. This could include discrepancies in title, liens on the property, or issues of ownership due to a previous owner. One of our duties is to check for title issues before closing to ensure you will be the rightful owner after the transaction.

We’ve been doing this for quite a while, so we have definitely seen it all when it comes to problems relating to title on property. There are, however, ten common issues we see the most in South Louisiana.

1. Bond for Deed
   1. A type of property transaction in which the buyer agrees to make a series of installment payments to the seller over a specified time. The buyer obtains possession of the property at the time the bond for deed contract is signed, but title is not transferred to them until the final payment is made. It sounds nice and tidy but usually ends in a mess that must be fixed before the next transfer of ownership.
2. Exceptions
   1. When you purchase property, you are buying a physical asset as well as all of the legal rights associated with the property. Sometimes, you purchase property that is subject to the rights of others or subject to restrictions (e.g. rights of way, building restrictions, HOA restrictions, etc.).
3. Mobile Homes
   1. To be or not to be that is the…wait. Movable or immovable is the question. Is the mobile home permanently attached to the land as a home structure, or is it simply a vehicle title? These differentiations can affect how a transaction moves forward.
4. Name Variations
   1. Whether it be marriage, divorce, or three middle names…name variations and how they are searched during a title transfer can make a difference in the chain of title. It is important that all variations are researched to ensure no liens or other title clouds are present on the property.
5. Open Mortgages
   1. When you purchase a home with a mortgage, that mortgage is placed as a lien on the property. As long as the loan remains unpaid, the lien remains on the title and the property usually cannot be sold or transferred until the loan is paid off. Once paid off, the lien is removed from the title and the property will be free and clear. Unfortunately, sometimes these mortgages, or liens, are not cleared once paid off (or not paid off at all).
6. Private Roads
   1. Typically an issue when dealing with large parcels of land or old, family land. The red flags to look for deal with road maintenance, specifications on who can use the road, and for what purpose.
7. Successions
   1. After a person passes away, his or her heirs must open a succession to sell the property they inherit. There are several ways to open succession in Louisiana, and many rules and guidelines to follow in order to complete one successfully. If the state laws and procedures are not followed, this can cause a cloud on the title and make ownership of the property foggy.
8. Survey Issues
   1. A survey can be an important step in your due diligence period, especially when buying large tracts of land. When a survey is not completed, many title clouds can be hidden including encroachments, permanent structures, and more.
9. Tax Sales
   1. Not paying your property taxes can have a negative impact on your ownership, especially if the property is sold in a tax sale. A tax sale has many moving parts and can create a very muddy trail of ownership of the property.
10. Trusts
    1. People often transfer their property into trusts, which can be created in connection with a will or as a living trust. Trusts must be reviewed with great detail in order to ensure that title to the property is properly transferred. Trusts issues can affect the ownership of the property and may require all possible owners to sign and agree to the details of a real estate transaction involving the property.