When people buy homes, what they technically acquire are the title rights for a property. The county recorder’s office updates official records to reflect the name of the new owner by recording the most recent deed. Title records also include information about liens and easements.
Typically, title records only change when owners sell their properties, die or lose them due to non-payment of property taxes or mortgages. Occasionally, outside claims to the title of the property could have major implications for the current owners.
What typically happens when an outside party asserts an interest in real estate?
The courts must review the situation
When there is a credible outside claim of interest in a specific piece of real estate, court intervention is typically necessary. If the owner facing the claim purchased the property with a mortgage, they are likely to have a title insurance policy that can support them as they respond to the claim.
The courts look at the ownership history of the property and the basis of the claim of the outside party. Title claims might stem from the mismanagement of real property during estate administration or could be the result of fraud.
If the courts review the case and determine that the outside claim is not valid, the current owners retain their interest in and possession of the property. However, if the courts side with the party bringing the claim, then the current owners may need to vacate the property. They lose their accumulated equity as well, unless they have title insurance to reimburse them for those losses.
Anyone learning about a potential outside title claim may need to act immediately to protect their home. Reviewing the basis of the title claim with a skilled legal team can help concerned homeowners protect their homes and their equity.