Understanding Title Issues: What Can Delay Your Real Estate Closing?

When you're about to buy a property, the last thing you want is a delay in closing. Unfortunately, one of the most common culprits behind real estate transaction delays is a problem with the title. In New York, where the property market is both fast-paced and heavily regulated, title issues can be especially disruptive. Below, we outline common issues that can delay your real estate closing and provide guidance on how to address them.

What Is a Title Report, and Why Does It Matter?

A title report is a document that provides information about a property and its ownership. It includes the history of ownership and any rights or claims others may have against the property. When you purchase real estate, you're not just buying the structure and land but also acquiring the legal rights that come with ownership. Any issues with the title can jeopardize your ability to take full ownership, secure financing, or sell the property in the future.

Common Title Issues That Can Delay Closing

Let’s now take a look at issues that might disrupt a real estate closing and how you can resolve them.

Unresolved Liens

Liens are one of the most common title issues that can stall or prevent a real estate closing. When a seller has unpaid debts such as back taxes, a court judgment, or overdue child support, those obligations can result in a lien being recorded against the property.

These liens can become a major red flag for buyers and mortgage lenders. In many cases, sellers are unaware that a lien still exists, especially if they thought the debt was already resolved or were never properly notified. Regardless, the property can’t be sold with a clean title until the lien is addressed.

You resolve a lien issue by first identifying the debt through a title search. Next, you work with the lienholder, whether it’s the IRS, a court, or a child support agency, to obtain a payoff amount and ensure the debt is satisfied. Once payment is made, a formal release or satisfaction of the lien must be recorded with the county clerk to clear the title. Acting early in the transaction is key to avoiding closing delays.

Undisclosed Heirs

When a property owner dies without a will, the estate is distributed according to New York’s laws of intestate succession. These laws determine who the rightful heirs are, often including spouses, children, or other relatives. If the probate process is incomplete or if not all heirs are properly identified, there’s a risk that an undisclosed heir may come forward later to claim a share of the property. This can create legal disputes and complicate or even invalidate a transfer of ownership, especially if the property has already been sold.

To reduce this risk, ensure your title search includes a review of probate records to confirm that the estate was fully and properly administered. If an undisclosed heir surfaces after the sale, the current owner may need to initiate a quiet title action to have a court confirm ownership and clear any competing claims. You can also consider title insurance, which offers protection by covering legal fees or losses if a valid claim is made by an unknown heir.

Errors in Public Record

Clerical mistakes in public records, such as deeds, surveys, or legal descriptions, can create discrepancies in a property's chain of title. These errors may seem minor, like a misspelled name or an incorrect lot number, but they can raise concerns during a title search and delay the closing process. Lenders and title insurers often require these issues to be cleared before approving a transaction.

To resolve this, a real estate attorney typically prepares a corrective document, such as a correction deed that fixes the error and gets it properly recorded with the county clerk. In some cases, especially if the original party is unavailable or the mistake affects ownership rights, court approval may be necessary.

Boundary Conflicts

Boundary disputes arise when neighboring property owners disagree about where one property ends and the other begins. These conflicts often involve fences, driveways, or shared areas and are commonly caused by outdated surveys, unclear legal descriptions in deeds, or years of informal use that shift perceptions of the true boundary.

The best way to address a boundary issue is to hire a licensed surveyor to conduct a current, accurate survey of the property. This provides a clear, legal reference for the property lines. If the dispute continues despite the updated survey, a boundary line agreement, mediation or court action may be necessary to formally establish the boundary.

Unreleased Ownership After Divorce

Sometimes, a seller may have gone through a divorce and bought out their former spouse’s interest in the property. However, if a new deed wasn’t filed removing the ex-spouse’s name from the title, the public record still reflects them as a co-owner. This can delay closing, as the ex-spouse technically still has a legal interest in the property and must either sign off on the sale or be formally removed.

To fix this, a quitclaim deed or other transfer document should be executed by the former spouse and recorded with the county clerk. If the ex-spouse is uncooperative or unreachable, legal action may be needed to quiet title or compel the correction.

Invalid or Fraudulent Deeds

Invalid or fraudulent deeds can appear in the chain of title when someone unlawfully transfers property without the true owner’s knowledge. This can lead to unknown individuals being listed as owners in public records, creating major title defects and raising questions about who actually holds legal ownership.

To resolve this, a real estate attorney must investigate the chain of title and, if fraud is confirmed, initiate a quiet title action or other legal proceeding to invalidate the fraudulent deed. Title insurance may provide some protection, but only if the fraud predates the buyer’s ownership and is not excluded from the policy.

Title issues can be frustrating, but with the right preparation and support, they don’t have to throw your whole deal off course. If you’re buying property in New York, getting a real estate attorney involved early can save you time, stress, and unexpected costs down the line. At Curcio Law, we help clients spot and fix title problems before they turn into closing delays. Get in touch with us today to see how we can help keep your transaction smooth and on track.