Five Ways a Real Estate Seller Might Not Have Clear Title


One of the most basic requirements of selling a piece of real estate is ensuring it has a clear title. In simple terms, this means that their ownership of the property is uncontested and without legal or financial complication. While this seems like it should be an easy requirement to fulfill, a shocking number of sellers will put their property on the market without checking to see if they have a clear title. Here are a few ways that might happen:


  1. The mortgage has not been fully paid off
    • One potentially serious reason a seller might not have a clear title is that they have not fully paid off the mortgage. Even a single unpaid mortgage payment means that the mortgage lender still has an interest in the property, which can complicate clear title. Selling a property, therefore, requires a resolution to this issue so that the deed can be transferred to the buyer without complication.
  2. A creditor has a lien on the property
    • A lien is a type of property interest that a creditor holds over a property due to an unpaid debt. Usually this happens when someone fails to pay their debts for a long period of time, although some people will agree to have a lien placed on their property as a way of securing a loan. If a piece of real estate has a lien on it, for whatever reason, then it does not have a clear title and the sale cannot proceed as normal. 
  3. The seller has unpaid taxes
    • It is not just private lenders who can come after a property owner for failing to pay their bills. Any unpaid taxes, especially unpaid property taxes, are treated as an issue that prevents a property from having clear title. Typically, this means the seller must clear up whatever tax issues they have before the sale can proceed.
  4. The property is tied up in divorce proceedings
    • It is very common for a married couple to sign both of their names to a deed when they decide to buy a home. This is all well and good, unless the couple later divorces, at which point possession of the house will almost certainly become a point of contention. Some people will try to sell the family home behind their spouse’s back when this happens, which not only means the property does not have a clear title, but also means that the buyer may be wrapped up in someone else’s divorce.
  5. A previous owner had an unknown or undisclosed heir
    • While it is a rare occurrence, sometimes people will leave behind a property in their will that they no longer own, due to failing to update their estate plan for an extended period of time. As a result, some real estate transactions can be rudely interrupted by someone claiming they own the property being sold due to an inheritance. In the event that this happens, it may become necessary to obtain a real estate lawyer to help sort through the mess.


    The law office of Georgaklis & Mallas PLLC is experienced in various areas of real estate-related transactions. The firm’s skilled attorneys handle both commercial and residential transactions on behalf of lending institutions, real estate investment and management companies, business and individual clients. Call (718) 238-2400 for more information or to schedule a consultation.