Property title issues can be a significant concern for home buyers in Canada, potentially affecting the ownership and value of their new homes. Here are five common property title issues with real-world examples:
Encroachments: Encroachments occur when a portion of a property extends onto a neighboring property. For example, a shed or fence might be partially built on your neighbor’s land. This issue can lead to disputes and may need to be resolved before a property transaction.
Easements: Easements grant certain rights to third parties, such as utility companies or neighbors, to use or access the property. In a real-world scenario, you may discover that part of your backyard is designated as a right-of-way for your neighbor to access their land, limiting your ability to build or landscape in that area.
Liens and Unpaid Debts: Liens can be placed on a property for unpaid debts like property taxes or unpaid contractors’ fees. If you buy a property with an existing lien, you could inherit the responsibility to clear the debt. For instance, you might purchase a house and later find out that the previous owner had unpaid property taxes, which you are now obligated to pay.
Title Fraud: Title fraud involves someone impersonating the property owner and fraudulently transferring the property’s ownership. In a real-world example, a fraudster might forge documents to sell a property they don’t own, leaving you to deal with the legal consequences of the fraudulent transaction.
Missing Heirs or Claims: When a property has multiple owners or heirs, some individuals may not have been properly documented in the title. This can lead to disputes or claims by undisclosed heirs. For instance, you could buy a property only to find out later that a distant relative has a legal claim to part of the property.
To mitigate these issues, it’s crucial to work with a knowledgeable Realtor and real estate lawyer and conduct thorough due diligence, including a title search and title insurance, before completing a property purchase in Canada. This will help ensure a smooth and secure transaction, protecting your investment and peace of mind.
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