Purchasing property is one of the largest financial commitments most people will make. In Florida, where real estate markets move quickly and property histories can be complex, a thorough title review is one of the most important steps in protecting your investment. Before any funds change hands, understanding exactly what you are buying, and whether anyone else has claims to the property, is essential.
What Is a Title Review?
A title review, also known as a title examination or title search, is the process of examining public records to determine the legal ownership of a property and identify any claims, liens, or encumbrances that may affect it. In Florida, public records including deeds, mortgages, court judgments, tax records, and plat maps are searched to establish a complete chain of title from the original grant of ownership to the current seller.
The goal of the title review is to confirm that the seller has the legal right to transfer ownership and that the buyer will receive clear, marketable title to the property. A title that is free of defects means the buyer can use, sell, or mortgage the property without interference from third-party claims.
What Attorneys Look For
A real estate attorney conducting a title review examines the property's history for a wide range of potential issues. Key areas of focus include:
- Chain of title: Every transfer of ownership must be properly documented and recorded. Gaps in the chain of title, missing signatures, improperly executed deeds, or recording errors can all create questions about who actually owns the property.
- Outstanding liens: Mortgages, tax liens, mechanic's liens, judgment liens, and homeowners' association liens must all be identified and resolved before the property can be transferred with clear title.
- Easements and restrictions: The attorney reviews whether any easements grant other parties the right to use portions of the property, and whether restrictive covenants limit how the property can be used or developed.
- Judgments and legal proceedings: Pending lawsuits, bankruptcy filings, or court-ordered judgments against the seller can affect the seller's ability to transfer the property.
- Survey discrepancies: Comparing the legal description of the property with a current survey can reveal encroachments, boundary disputes, or discrepancies between what the buyer expects to receive and what the records reflect.
Common Title Issues in Florida
Florida's long history, diverse population, and active real estate market contribute to a variety of title issues that may not be immediately apparent. Some of the more common problems encountered during title reviews include:
- Unreleased mortgages: Previous mortgages that were paid off but never formally released from the public record remain as apparent liens on the property.
- Heir and probate issues: When a property owner dies without a will, or when an estate is not properly probated, multiple heirs may have claims to the property that were never resolved.
- Code enforcement liens: Municipal code violations can result in liens that accumulate significant penalties over time, sometimes exceeding the value of the property itself.
- HOA and condo association claims: Unpaid assessments or special assessments by homeowners' or condominium associations can create liens that must be satisfied at closing.
- Forged or fraudulent documents: Although less common, forged deeds, fraudulent satisfactions of mortgage, or identity-related title fraud do occur and can create serious complications.
In South Florida, where properties may have changed hands multiple times and gone through foreclosure, short sale, or probate proceedings, title issues are more common than many buyers realize.
Title Insurance and Its Role
Title insurance is a policy that protects the insured party against financial loss resulting from defects in the title that were not discovered during the title search. In Florida, there are two types of title insurance policies:
- Owner's policy: Protects the buyer's ownership interest in the property for as long as they own it. This is a one-time premium paid at closing.
- Lender's policy: Required by most mortgage lenders, this policy protects the lender's interest in the property up to the loan amount. The buyer typically pays for this policy as well.
While title insurance provides important protection, it is not a replacement for a thorough title examination. Title insurance covers unknown defects; a proper title review identifies and resolves known issues before they become problems. The two work together to provide comprehensive protection for the buyer.
Protecting Your Investment
A careful title review is an investment in peace of mind. By identifying and addressing potential issues before closing, buyers can avoid disputes, unexpected financial obligations, and even the risk of losing their property to a superior claim. In a competitive market, the pressure to close quickly should not override the importance of due diligence.
Working with an experienced real estate attorney who understands the nuances of Florida property law ensures that your title review is thorough and that any issues are resolved properly. The Law Office of Gregg R. Margre has been assisting property buyers and sellers across Miami-Dade and Palm Beach counties since 1988, providing careful title review and closing services that protect our clients' interests.
This article is for informational purposes only and does not constitute legal advice.