Common Title Problems
and How They're Resolved

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Title Problems Are More Common Than You Think

Industry data suggests that roughly one in four title searches uncovers at least one issue that must be resolved before a property can change hands. While that statistic may sound alarming, the vast majority of title problems are resolvable -- provided you have an experienced title team handling the work.

Here are the most common title problems and how they typically get cleared.

1. Unreleased Mortgages

This is the single most common title issue. A previous owner paid off their mortgage, but the lender never filed a satisfaction or discharge of mortgage with the county. The old mortgage remains "of record," creating a cloud on title.

Resolution: The title company contacts the prior lender (or its successor, if the lender was merged or acquired) to obtain a proper discharge. In some cases, an indemnity letter or title affidavit is used to clear the defect.

2. Tax Liens

Unpaid federal income taxes, state taxes, or local property taxes can result in liens against the property. Tax liens are senior to most other claims, meaning they must be satisfied before any sale can proceed.

Resolution: Tax liens are typically paid off at closing from the seller's proceeds. The title company ensures the payoff amount is current and that a release is obtained after payment.

3. Judgment Liens

If a property owner loses a lawsuit or has an unpaid court judgment, the creditor can file a lien against the owner's real property. Judgment liens attach to all real property owned by the debtor in the county where the judgment is docketed.

Resolution: The judgment must be satisfied (paid) or vacated (dismissed by the court) before closing. In some cases, the title company works with the seller's attorney to negotiate a settlement.

4. Mechanic's Liens

Contractors, subcontractors, and material suppliers who perform work on a property but are not paid can file a mechanic's lien. In New Jersey, the contractor must file within 90 days of the last work performed. These liens can be filed without the current owner's knowledge if the work was ordered by a previous owner or tenant.

Resolution: The lien must be paid, bonded around, or discharged by the claimant. Title companies coordinate with the seller's attorney to resolve these before closing.

5. Boundary and Survey Disputes

A survey may reveal that a neighbor's fence, driveway, shed, or other structure encroaches onto the subject property -- or vice versa. Boundary disputes can also arise from conflicting legal descriptions in deeds.

Resolution: Minor encroachments may be resolved through an encroachment agreement or a boundary line adjustment. More significant disputes may require a quiet title action or negotiation between the parties. Title insurance may exclude known encroachments unless they are specifically addressed.

6. Missing or Unknown Heirs

When a property owner dies, their estate must go through probate (or administration) before the property can be sold. If the estate was improperly probated, or if an unknown heir exists, a claim could arise after closing.

Resolution: The title company reviews probate records to confirm that the estate was properly administered and all heirs accounted for. In complex cases, a quiet title action may be necessary. Title insurance provides protection if an unknown heir surfaces after closing.

7. Forged or Fraudulent Deeds

Though rare, forged deeds do occur. A deed with a forged signature is void -- meaning it transfers no legal interest, regardless of how many subsequent transfers occurred. If a forged deed exists anywhere in the chain of title, the current buyer's ownership is at risk.

Resolution: This is one of the most serious title defects and is precisely why owner's title insurance exists. If a forged deed is discovered after closing, the title insurance company defends the owner's title and covers any financial loss.

8. Errors in Public Records

Clerical errors in county records -- misspelled names, incorrect legal descriptions, transposed lot numbers -- can create confusion about ownership. While these are usually innocent mistakes, they can delay closings if not caught early.

Resolution: Corrective deeds, scrivener's affidavits, or court orders can fix recording errors. An experienced title examiner catches these during the search process.

Why an Experienced Title Company Matters

Every one of these issues has a solution, but finding and implementing that solution requires expertise, persistence, and strong relationships with lenders, attorneys, and county recording offices. At Simplicity Title, our team has cleared thousands of title defects across New Jersey and New York. We catch problems early and resolve them before they delay your closing.