A NC property’s title describes the rights the owner has to the land.

The North Carolina Real Estate title also covers anything that’s permanently affixed to the land-buildings, fences, and swimming pools. The title itself is a legal document that assigns those rights. When a property is put on the market, the buyer and the lender want to know whether the seller has the legal right to sell it, and if there are any liens or encumbrances that may hinder the lender’s ability to secure the property.

North Carolina Title Search

    • Before a property is sold, a title search is conducted to determine if there are any defects-any aspects that might encumber or inhibit the owner’s rights to the property on the title-such as liens, easements, or any other ownership claims. A title defect (also referred to as a cloud on the title) may cause the owner to lose all or part of the land to the superior ownership interest or claim of another.
    • Title searches are performed by the closing attorney on the prospective buyer’s behalf, and typically include:
    • A search for liens against the property or owner/parties on the title (typically, this will turn up the seller’s existing mortgage loan and any home equity loans, as well as any mechanic’s liens)A search for bankruptcy proceedings against the property owner
    • A search for liens against the buyer (valid on for sale transactions only)A search for easements; covenants, conditions, and restrictions (CC&Rs); agreements; resolutions; and ordinances that may affect the real property in question.

Contact Dwain Ammons, Broker for quick Real Estate help in NC. (828) 447-0036

North Carolina Title Defects

  • Title defects and encumbrances vary widely. The following are examples of defects and encumbrances that could jeopardize rightful ownership:
  • Forgery and fraud (in connection with execution of documents)Undue influence on a grantor or executor
  • False impersonation by those purporting to be owners of property
  • Undisclosed or missing heirs
  • Wills not properly probated
  • Mistaken interpretation of wills and trusts
  • Mental incompetence
  • Conveyance by a minor
  • Birth of heirs subsequent to the date of the will
  • correct legal description
  • Non-delivery of deed
  • Unsatisfied claims not shown on the record
  • Deed executed under expired or false powers of attorney (defective deed)Confusion due to similar or identical names
  • Dower or curtesy rights of ex-spouses or former owners
  • Incorrect indexing
  • Clerical errors in the records
  • Delivery of deeds after the grantor’s death

Clearing North Carolina Title Defects

When defects are found during a title search, the title may be considered defective or unmarketable. The defects must be resolved by the seller before the settlement date, so that a clear and marketable title may be offered as part of the sale.

During The Seller’s Ownership

If a lien or judgment occurs during the time the seller actually owns the property, the seller is obligated to resolve the defect before the property can be sold. In some cases it may be as simple as the seller providing receipts or lien waivers to prove that no outstanding lien actually exists. Or, as often happens with a mechanic’s lien (for construction work done on a property), the seller might need to provide an affidavit that no work has been done in the last 120 days (the statutory lien filing period), or that any work during that time has already been paid for. If the lien hasn’t been paid off at the time of the title search, it’s possible that during the negotiations with the buyer some of the proceeds of the sale of the property can be used to pay off any outstanding liens, such as tax liens or mechanic’s liens. All mortgage and home equity liens need to be paid off before closing can take place.

Before the Seller’s Ownership

If the defect occurred prior to the seller’s ownership, the seller would then need to file a claim with the title insurance company. Hopefully the policy that the owner purchased will cover the specific defect, in which case the title insurance company would be obligated to resolve the problem (not the seller). Title insurance companies have a claims department staffed with attorneys whose job it is to evaluate claims and attempt to resolve them.

North Carolina Quitclaim Deeds and Quiet Title Suits

In the case of a foreclosure or inheritance claim creating the defect, the claimant (or former owner, in the case of a foreclosure) can sign a quitclaim deed to remove any claim they may have to the property.

When more extreme measures are necessary, or when the issue may require court intervention, title defect removal may be accomplished through a quiet title suit. A suit to quiet title is basically a lawsuit that asks the court to decide who has claim to the property and who does not, removing or “quieting” any claims to the property, and therefore eliminating clouds or defects. Claimants can come to the hearing to state their case, and a judge rules on the claims’ validity. A quiet title suit might be used when:

The property boundaries are uncertain, or when easements that were instituted in the past and are no longer in use. When the suit is resolved and the title is quieted, often the land will be surveyed and the boundaries identified as long as there are no disputes to the action.

A lienholder lays a claim to the property, but has no related documentation or proof.

Heirs exist who may try to claim ownership to the property, and/or evidence is lacking that those heirs have given up their ownership claim (by signing a quitclaim deed or similar).Clerical errors exist on the deed.

This article is not being presented as legal advice. If a title appears to have a problem and proper NC attorney should be contacted to remedy the problem.

 

Contact Dwain Ammons, Broker for quick Real Estate help in NC. (828) 447-0036

 

Dwain Ammons, Realtor®,
C2EX, e-PRO®, PSA, SFR®
 
ALLEN TATE / BEVERLY-HANKS, REALTORS®
Dwain Ammons, Realtor® is a WNC Real Estate Broker and a WNC native. Kind professional help is available to help you with either buying or selling personal or commercial real estate.
 
Hendersonville Office
Office:   (828) 697-0515
Mobile:  (828) 447-0036
 
Lake Lure Office
Office:   (828) 436-5120
Mobile:  (828) 447-0036

 

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NC Zip codes served. Includes NC Luxury Homes, NC Lakefront, NC Land Listing Services.
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