One essential element of any commercial real estate transaction is ensuring that the seller holds clear title to the property. A clear title means that no other person or business entity has any claim to or interest in the real estate other than the buyer and seller. If the title is not clear, a buyer may not wish to go through the purchase of the property. The biggest problems are the great unknowns: unknown liens, heirs, encumbrances, or easements. For example, a lien may have been placed on the property, perhaps by a local or state government entity for unpaid taxes, or by a creditor to whom the owner owes money for an unpaid judgment. Until the title issue is resolved, the property will remain subject to the lien. If the buyer took ownership of the property and later wanted to transfer or mortgage the property, he or she would be responsible for paying the lien or judgment in question to get a clear title. In many circumstances, a cloud on a real estate title often will land the parties to a real estate transaction in a lawsuit.
As a result, most parties to any type of real estate transaction require an investigation of the title of the real estate, or a title search and title insurance. A title search is a standard part of a real estate buy/sell agreements. A title search that reveals a problem with title can cause a real estate transaction to fall apart. And even if the purchase closes, if the purchaser later discovers a title defect that the title insurance company failed to unearth, he or she may have a valid claim against the title insurance company for failing to perform its duties.
Fortunately, there may be some options for salvaging a transaction when there is a problem with the title. For instance, if all parties involved are willing to work together to correct the title problem, it can be fairly easy to fix the defect in the title. An action to quiet title also can be a solution to a title defect. However, if one or more parties are unwilling to resolve the matter by agreement, then litigation may ensue.
Whether you are involved in a real estate sales dispute or another type of business related conflict, we are here to help. We will determine the facts and circumstances surrounding your situation, evaluate your case, and determine the best strategy for resolution. At Williams Mestaz, L.L.P., we have the experience and knowledge that you need for your business litigation matter. Contact Williams Mestaz, L.L.P., at (602) 256-9400 for help.