How to Resolve Gaps in Real Estate TitlesThe Paralegal Resource
September 20, 2012 — 1,498 views
When an individual or group of individuals purchases a piece of real property, they are assigned that property's title on an effective date. The effective date is generally the date on which the sale was closed and the buyer signed all sales-related paperwork. Though the purchaser owns the piece of real estate as of the effective date, there is often something called a gap between the purchase and the official recording of the deed.
Gaps in real estate titles are generally caused by clerical backlogs. When a title company completes sale paperwork, they file a new deed and mortgage, if applicable, with a municipal Register of Deeds. It may take several weeks for the staff at the Register of Deeds’ office to update municipal records to reflect new property ownership. Many real estate professionals estimate that the general length of the gap is from two to three weeks.
However, there are some situations in which a gap must be addressed and resolved by a legal professional. If the client of a law office needs to prove ownership of property but has discovered a title gap, it is essential that the gap be closed as quickly as possible. Paralegals who work to close title gaps should keep the following steps in mind. Remember that a title gap may be caused by clerical error at any phase of the sales process.
Ask the buyer to bring in all purchase documents and a copy of the title. Examine the client's documents to determine the day on which the property was purchased and the title was signed. Be sure to note the name of the title company, the title's effective date and any information about the property or parcel used for identification.
Contact the title company who prepared the buyer's paperwork. Ask to speak with the title officer who was in charge of your client's transaction. Ask for a copy of the paperwork filed with the Register of Deeds. Ask the title company if they have proof of delivery or a receipt from the Register of Deeds’ office.
Contact the Register of Deeds’ office. Take a copy of the paperwork you have gained from the title company to the Register of Deeds’ office. Ask to speak with the clerk responsible for updating deeds. Work with the clerk to determine why the deed has not been updated. If at all possible, insist that the deed be updated while you are at the office.