What happens when a lawsuit related to title issues is filed?

On Behalf of | Jun 18, 2024 | Title Issues

The title records for a property help establish who the property’s owner is. State title records can also validate liens against the property and confirm the existence of easements. People buy the right to title from one another during real estate transactions.

Title research is a key aspect of acquiring real estate. Most home buyers invest in title insurance. The insurance provider typically does a review of a property’s title records before issuing the policy. Most people assume that their right to title has complete protection after they sign papers at the closing.

However, title issues could arise years into someone’s tenancy at a property. An heir who didn’t receive notice of estate administration or a spouse who never signed a deed might claim to have an ownership interest in the property. Victims of fraud might also believe they have a right to the property. Those who believe they have a claim to title may file a lawsuit against the current owner.

What happens during title litigation in civil court?

Each party tries to prove their claim

Title litigation requires a thorough review of ownership records, financial paperwork and other evidence. Both parties do their best to establish that their claim to the property is legitimate. Deeds, receipts for tax payments and other records can help affirm someone’s claim but they have an ownership interest in the property. A judge ultimately makes the decision based on what the preponderance of the evidence supports.

What if the other party prevails?

The worst-case scenario for a homeowner facing a title claim is that the party bringing the claim convinces a judge they are the rightful owner. In that scenario, the plaintiff may have a right to either financial compensation or possession of the property. Title insurance plays a key role in this process. Someone’s title policy can help pay for their legal representation. It can also potentially reimburse them for what they have invested in the property and lost because of the lawsuit.

Responding early and assertively to title claims is typically the best way for people to protect their real property holdings during litigation. Homeowners who understand what is at risk may see the value in acting as soon as possible.