What Stops a House from Being Sold

When the housing market is healthy and there is an abundance of buyers that can get into bidding wars over a property, one of the most asked questions of real estate attorneys is, “What stops a house from being sold?” For many buyers, there is nothing more frustrating than being locked in on a desired property when suddenly something hits the brakes.

The best way to minimize the chances of finding yourself in this situation is by understanding what stops a house from being sold so that you know what to look for and how to avoid this situation.

Buying and Selling Houses and the Role Title Companies Play

When a person wants to buy or sell a house, there is a process. Many buyers and sellers opt to work with a realtor, but some might be surprised to find it is not always necessary.

A buyer can work with the seller to negotiate a price, give some earnest money, and sign a contract saying they agree to buy the property. This is sometimes called an earnest money contract, which should then be deposited to a reputable title company.

From here, a title company is tasked with running a title search and preparing a formal report for the involved parties to review. The top 3 things a title company typically looks for and determines include:

  1. Is the person selling the property the sole owner of the property? If not, do they share a title with someone? If so, is the other person a spouse, ex-spouse, or a family member? Which parties are required to sign the paperwork for a legal and valid conveyance?
  2. How did the person selling the property get the property? In other words, did they buy it? Did they inherit it? Did they receive it as a gift?
  3. Are there any liens, encumbrances, or abstracts of judgements on the property in question?

Once the title company has the answers to the above questions, that information is then turned over to the buyer for a detailed review.

Now to answer the question, what do the above answers have to do with what stops a house from being sold?

  • If the seller contracting with the buyer represents that they are the sole owner when there is actually more than one owner, this can stop a house from being sold. For one person to sell the property they must have 100 percent ownership. If there is shared ownership of the property, all owners must sign off on the agreement.
  • Mineral Rights. The property contract should be extremely clear on whether the rights to the property include mineral rights or merely surface rights. Vague language and gray areas regarding mineral rights may be enough to stop a house from being sold.
  • It is necessary to know if there are any types of easements or leases against the property. If this is not made clear, it may be enough to halt the sale of the house before it can be lawfully completed.
  • If there are any mortgages, IRS liens for unpaid taxes, or property tax liens, they must be properly disclosed to the seller through official channels. Failure to do so can halt the sale of a house.

How a Real Estate Attorney Can Help with the Title Report Results

Getting the completed title report back is only part of the process. Hiring a seasoned and qualified real estate attorney to help sort through the title report results is the other.

For example, if a title report comes back with issues that need to be addressed, a real estate lawyer can assist with either correcting the issues or working with the relevant parties to get it resolved. Some of the most common issues attorneys deal with in title reports are ownership issues, in which case they can help with:

  • Determining if there needs to be another signatory and who that is.
  • Identifying if there is a problem in getting the necessary signature, determining what the problem is, and negotiating or offering something to get it. Negotiation may not be necessary if there is an issue of laches, statue of limitations, trespass to try title, etc., but each requires a real estate attorney’s legal experience.
  • Dealing with IRS tax liens. If there is a judgement or lien against a property for sale, the seller and title company must get approval from the Internal Revenue Service before finalizing the deal. The IRS will require property appraisals to know if the price is of fair market value. Once approved, the IRS will need to “release the property” to be sold. The result of this could be that all the proceeds of the sale go directly to the IRS to pay off the lien. Sellers that know this is likely to happen may want to back out of the sale. However, this is where an attorney for the buyer would help enforce the earnest money contract and sale, regardless where the proceeds end up going.
  • Enforcing earnest money contracts. If the buyer identifies a lien, easement, or some other kind of title issue and gets cold feet, they may want to back out. Again, a real estate attorney can help address the issue by enforcing the contract, working to get the title issues resolved, and pushing the sale through.

 

When it comes to what stops a house from being sold, most of the issues can deal with problematic results in a title report. To protect yourself, as the buyer or seller, reach out to a professional real estate attorney today.

What Constitutes a Claim to Title in Real Estate

The buying and selling of commercial real estate property can be very profitable, but it is often more complicated than that of residential properties, especially when it comes to a claim to title. The complexity of the issue has many commercial buyers and sellers left wondering what constitutes a claim to title in real estate. Having a knowledgeable real estate attorney guide you through the process can significantly protect your rights and financial transactions.

What Constitutes a Claim to Title in Real Estate?

A claim to title in real estate can be difficult to comprehend without the knowledge of basic terms and definitions. A title is a legal document with critical information about who owns a property, and it may be in the form of a deed.

When a piece of real estate comes up for purchase, a buyer needs to know existing and pertinent information about that property. The best way to accomplish this is to perform a title search. This process is designed to thoroughly examine all recorded transfers for the specific property to ensure there are no problems that could negatively affect the purchase.

A title search is designed to:

  • Effectively trace property ownership
  • Find existing liens
  • Identify encumbrances, including easements, made against the property

If an encumbrance is found on a property, it essentially equates to an outstanding claim to title.

What Does a Claim to Title in Real Estate Mean?

If a claim to title issue in real estate is an encumbrance, what situations might that include? While the following list is not exhaustive, some instances of an encumbrance existing on a property can include a:

  • recorded lien against a property for the purposes of securing a debt
  • failure to pay required taxes
  • mortgage that has been paid in full but not reconveyed in the mortgage deed
  • omission or mistake in the deed
  • prior ownership to the property that was not properly transferred to a later owner
  • undisclosed owner
  • disagreement regarding property ownership that could include hostile takeovers via adverse possession

If a title search yields a claim to title, it then becomes the buyer’s responsibility to review any claims and then file their objections to that search report by the specified deadline. Once the buyer has put this in motion the seller typically has a window of time in which they can respond to and resolve those concerns, or the buyer can walk away from the transaction.

How a Real Estate Attorney Can Help

When dealing with commercial real estate and what constitutes as a claim to title, it is advised to have a knowledgeable attorney working by your side and advocating to protect your rights. Residential real estate and commercial real estate can be vastly different at times, so ensure that you are working with legal counsel that specifically understands the innerworkings of commercial real estate deals.

A commercial real estate attorney can assist with the title examination process that happens while a property is under contract. Problems or concerns identified during the title examination must then be presented to the buyer, so they can decide whether to pursue the purchase or withdraw from the transaction altogether.

In commercial real estate, a title examination can be detailed and complex with a number of moving parts. For individuals not familiar with the wide range of issues that can arise or the legal terminology that goes with them, this process is best handled with the presence of an attorney. Legal counsel can advocate for a client’s rights and help them decide the best path forward from a claim to title for a property they originally planned to purchase.

What to Look for in a Commercial Real Estate Attorney for a Claim to Title

When a business needs to investigate what constitutes as a claim to a title in real estate, it is key that they work with an attorney with experience in this specific area of law. Some considerations to keep in mind when looking for a commercial real estate attorney who can help with a claim to title include:

  • Experience and expertise in representing clients in claim to title cases
  • Proper licensing to practice within the state of Texas
  • The number of cases they have successfully represented concerning this issue
  • The ability to officially represent an entity in a court of law, should it be necessary

 

Make the most of your commercial transactions. If you are a buyer or seller dealing with an unexpected claim to title in real estate, reach out to a trustworthy and reputable commercial real estate attorney for help.

Why A Second Marriage Could Be A Fast Track to A Lawsuit

Marriage is a celebrated union, but for those entering into a second marriage, it could also be the fast track to a lawsuit. Remarrying creates an extended family in which not everyone may get along. Sometimes a second marriage can be an issue for children of a previous marriage and the new spouse, especially when it comes to an individual’s estate. It is for this reason, and countless others, that proper estate planning is critical to protecting your assets and having them distributed exactly as you wish in the event of your death.

Possible Legal Complications for Second Marriages

While a second marriage can be full of new hope and a growing family unit, there may be some legal complications that can come with them. In the grand scheme of things, it largely boils down to one concept: lack of estate planning.

Proper estate planning is essential for second marriages because without it, the children and the new spouse may:

  • Question each other’s motives for their relationships with the asset holder
  • Be at odds with one another about the distribution of assets
  • Disagree on how to manage family assets
  • Argue about how to operate a business after the principal owner has passed
  • Resort to contentious legal battles that typically cost hundreds, if not thousands, of dollars

What You Can Do to Reduce Estate Complications of a Second Marriage

While estate issues are often inherent to a second marriage, there are steps that individuals can take to limit those complications:

  1. Prenuptial Agreement. Although it may be awkward, it is an excellent idea for those entering a second marriage to have a prenuptial agreement drafted before the marriage takes place. The purpose in doing so is having a legal document drafted by an attorney that discloses both spouses’ liabilities, assets, and income to facilitate assets being distributed specifically as an individual wishes in the event of divorce or death. It is highly recommended that both spouses get legal representation for a prenuptial agreement.
  2. With a living trust, a creator of sound mind can designate specific beneficiaries. An attorney proficient in estate planning can assist with the creation or amending of a trust. This strategy can be effective for bequeathing assets and managing estate and inheritance taxes.
  3. Proactive Measures. It is beneficial to take proactive measures to review beneficiary designations on important policies, accounts, and documents. This can include retirement accounts, life insurance policies, bank accounts, real estate, and even power of attorney.

Each of these steps should be taken with the following in mind:

  • Provision for children from a previous marriage
  • Provision for your new spouse
  • Provision for children that may result from the second marriage

Special Considerations to Discuss with An Attorney

Particularly during a time of such joy and excitement as that which comes with a new marriage, estate planning can get pushed to the back burner, but doing so is a grave disservice to yourself and your loved ones, so don’t wait.

Some items to discuss with an attorney regarding estate planning for a second marriage include:

  • Is it a second (or third) marriage for one or both of you?
  • Do one or both of you have children from a previous marriage?
  • Have you considered getting a prenuptial agreement?
  • Do you already have a will in place?
  • If so, have you named an executor of your will and is it still who you want it to be?
  • Is there a trust in place, and if not, does there need to be?
  • Are you content with named beneficiaries for insurance and retirement plans or do they need changes?
  • Will assets designated for children be distributed before or after the new spouse passes away?
  • Are you still financially obligated to a previous spouse?
  • Have you discussed having separate bank accounts vs. joint banking accounts?

These can be difficult conversations to have, but by putting provisions in place now, it could save those you love additional emotional angst after your passing.

Why You Need an Attorney for Second Marriage Estate Planning

Estate planning for a first marriage can be incredibly complex based on an individual’s wealth and assets, but it becomes substantially more complex for a second marriage. Working with an experienced and reputable estate planning attorney can give an individual more confidence in the process, the validity of documents created, and peace of mind that their assets will be distributed according to their specific wishes.

When searching for legal representation:

  • Ensure the individual is licensed to practice in the state.
  • Verify their previous representation of similar cases and their outcomes.
  • Research the experiences of previous clients.
  • Establish how the attorney best communicates with clients.
  • Verify the cost of representation and any associated fees.

If you are entering a second (or third or fourth) marriage, it is important to seek counsel from an estate planning attorney to protect your loved ones and help avoid the fast track toward a lawsuit.