Like it is in the rest of the country, closing on a home in Florida is a big step for a homebuyer. Unfortunately, there are many things that can go wrong, causing a delay in the sale, extra costs, or even voiding the transaction altogether. For example, when a contractor files a lien on a property to make sure he gets paid, no closing can occur until the lien is lifted.
In our experience as attorneys, we’ve each helped many couples and individuals close on homes over the years, but the client that stands out the most contacted us about a year ago. He was in the process of closing on a home but wanted to make sure he covered all his bases. When we researched the title on the home, we noticed that someone other than the seller had a claim on the title. We notified our client of the claim and helped him get out of the transaction without losing any money. Although the property had seemed perfect for him, we were able to work with him to find another property that was just as beautiful for a lower price.
If you’re thinking of buying a home, make sure you avoid these three title issues if you want to avoid getting caught up in someone else’s legal trouble:
Innocent Purchaser of Value
In Florida, an innocent purchaser of value is not responsible for paying any claims to property he or she has purchased. In order to be an innocent purchaser of value, however, one must not have knowledge of any other claims when the transaction takes place.
Known Prior Claims on Property
On the other hand, if you purchase a property with the knowledge of prior claims on it, you accept responsibility for the costs associated with those claims. These claims might be, as mentioned above, put in place by a contractor who has done work on the property. Before the buyer can close on the property and take possession of it, these costs must first be paid out.
Common Source of Title
Sometimes multiple parties can claim ownership of a property title. When this happens, both parties have to argue why they have a better claim to ownership. Whoever provides the best evidence or argument is held to be the true owner of the property.
If during a closing the seller is found to be in contest for a property, no transaction can take place until the courts rule on who owns the property. Should the seller be found by the court to not own the property, the sale will be voided.
If you’re looking to buy a new home, let these examples serve as an indication of the things that can go wrong during a closing. To keep from falling victim to these common issues, don’t buy a home on your own. Contact the real estate law experts at AM Law. Our experience gives us a unique perspective on the implications of real estate law on your home purchase.