What are some common defects that could ‘cloud’ a title?

There are a lot of details that go into buying a home in Delaware, including having a title search performed on the property. If the title search reveals a defect “clouding” the title, the defect must be resolved before the home can be sold. The following are some common defects that could come up in a standard title search.

Mechanic’s liens

Mechanic’s liens are a common issue that may come up in a title search. A mechanic’s lien is a lien placed against the home that the general contractor files prior to beginning work on the home. Once the work is done, the lien should be released, freeing the home to be sold and ensuring that the general contractor will be compensated for their work. However, if the lien is contested or if the general contractor does not file a “satisfaction” action, the lien will not be removed from the property and will need to be resolved before the home can be sold.

Bankruptcy

It is not unusual for a person to go through bankruptcy or to marry someone who has in the past. However, if the person who filed for bankruptcy did not sign off on the deed, or if the bankruptcy itself did not get discharged, this could show up on a title search, clouding the title to the home. When this happens, generally it is necessary to move the court to release the home so it can be sold.

Past due child support

If a parent who pays child support fails to make payments in full or on time, a lien could be placed against their home. If they try to sell the home without paying what they owe and thus clearing the lien, or even if they do pay what they owe but forget to remove the lien, the lien will remain on their property delaying the sale until it can be resolved.

Clearing the defect so the home can be sold

Sometimes a seller knows of a lien on their property or other title defect, but other times it can come as a complete surprise. However, any liens on a home must be resolved before the home can be sold. It may be necessary to obtain a quit claim deed, a release of lien/judgment or a deed of reconveyance to resolve a title defect. These are all legal processes, so those in Delaware who are buying or selling a home with a title defect may want to seek the advice of an attorney before proceeding.

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