As lawyers focusing in real estate law, we have encountered our fair share of bizarre and unexpected title issues here at Fox & Moghul. In today’s blog, we will explain what title is, the types of deeds that exist, and why it’s best to buy property in Virginia with a general warranty deed with English covenants of title. We will also present three strange examples of title defects and discuss the importance of obtaining enhanced title insurance. Let’s dive in!
Title, in the context of real estate, refers to the legal ownership of a property, including the rights associated with that ownership. When you buy a property, you receive a deed, which is a document that transfers ownership of the property from the seller to the buyer. There are three primary types of deeds: quitclaim deeds, special warranty deeds, and general warranty deeds.
Quitclaim deeds offer the least protection to the buyer, as they only transfer whatever interest the seller has in the property, without guaranteeing the seller’s ownership. Special warranty deeds warrant that the seller has not encumbered the property during their ownership, but do not warrant against defects arising before that time.
In contrast, general warranty deeds with English covenants of title provide the most comprehensive protection to the buyer. These covenants include the covenant of seisin (ownership), the covenant of the right to convey, the covenant against encumbrances, the covenant of quiet enjoyment, the covenant of warranty, and the covenant of further assurance. In Virginia, it’s best to buy property with this type of deed to minimize potential title problems.
Now, let’s explore three bizarre examples of title defects that can jeopardize your home purchase:
- Forgotten Heirs: In one case, a long-lost heir of a previous owner emerged, claiming ownership of the property. This heir argued that their ancestor’s will was improperly probated, rendering the subsequent transfers of the property invalid.
- Adverse Possession: In another instance, a homeowner discovered that their neighbor had been using a portion of their land for several years, potentially giving the neighbor a claim to the property under the doctrine of adverse possession.
- Forgery and Fraud: In a particularly shocking case, a buyer discovered that the person who sold them the property was an imposter who forged the real owner’s signature on the deed.
These examples illustrate the importance of obtaining enhanced title insurance when purchasing a property. Enhanced title insurance covers the policyholder against losses resulting from title defects, including those not discovered during the initial title search. Some key terms to be aware of when obtaining this insurance include “insurable title” and “marketable title.” Insurable title refers to a title with defects that an insurer is willing to cover, while marketable title means a title that is reasonably free from defects and can be transferred without the risk of litigation.
In conclusion, real estate transactions can be fraught with unexpected and bizarre title issues. To protect your investment, always purchase property in Virginia using a general warranty deed with English covenants of title, and secure enhanced title insurance. By taking these precautions, you can minimize the risks associated with title problems and enjoy peace of mind as a property owner.
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