Resolving Title and Boundary Disputes in Real Estate Contracts

When an individual holds title in certain land, the title represents that the holder has certain legal ownership in the property. In this blog, we will explore the intricacies of title and boundary disputes in real estate contracts and provide insights on resolving these issues.

Title disputes arise when there are conflicting claims regarding the ownership of a property. This can result from a variety of reasons such as: unclear records, errors in deeds, or fraudulent transactions. Resolving title disputes is crucial for ensuring clear property ownership and facilitating real estate transactions.

Dispute & Conflict Causes

Title disputes in real estate can have various causes, creating conflicts over ownership and legal rights to a property. Understanding these common causes helps individuals involved in real estate transactions take preventive measures and conduct thorough due diligence to minimize the risk of title disputes. Here are some causes that lead to title disputes:

Unclear Property Descriptions: Vague or unclear property descriptions in legal documents, such as deeds or surveys, can lead to disputes over the actual boundaries of a property.
Inaccurate Missing or Incorrect Documentation: Missing or inaccurate documents related to property deeds, transactions, or recorded easements can create uncertainty and disputes over ownership.
Fraudulent Conveyances: Unlawful or fraudulent transfers of property, including forged signatures or unauthorized transactions, can result in disputes over the rightful owner.
Unresolved Heirs or Creditors: Disputes may arise when there are unresolved claims from heirs, beneficiaries, or creditors who believe they have a legal right to the property.
Undisclosed Liens or Encumbrances: Failure to disclose existing liens, mortgages, or other encumbrances on the property can create disputes, especially if the buyer discovers these issues after the transaction.
Chain of Title Issues: Any breaks or gaps in the chain of title, which demonstrates incomplete or inconsistent records of property ownership, can lead to disputes.
Prior Mortgages: Claims from previous mortgage lenders or unresolved mortgages on the property can create disputes over ownership and financial obligations.
Probate and Inheritance Issues: Disputes may arise when there are questions about the validity of wills, inheritance rights, or probate proceedings affecting property ownership.
Errors in Public Records: Errors in public records, including clerical mistakes or inaccuracies in recorded documents, can lead to title disputes.
Defective Deeds: Deeds with incorrect legal descriptions, lack of proper signatures, and/or other defects can result in disputes over the validity of property transfers.
Adverse Possession Claims: Claims of adverse possession, where someone obtains ownership rights intentionally or unintentionally through continuous and open use of the property without the owner’s permission, which can lead to title disputes.

Resolutions for Disputes

Resolving title and boundary disputes in a real estate contract requires a careful and strategic approach, making it prudent to seek the assistance of a contract dispute lawyer. Here are some resolution strategies for addressing possible issues in title and boundary disputes:

Title Insurance: Invest in title insurance to protect against unforeseen title defects or disputes. This can provide financial coverage for legal expenses and potential losses.
Quiet title action: In Florida, an action for quiet title is a civil lawsuit to ask the court to declare a judgment terminating rights on parties with clouded title.
Due Diligence: Always conduct a title search to identify any existing liens, encumbrances, or disputes related to the property. Verify the accuracy of property descriptions and boundaries through professional surveys and inspections.

The process to resolve title and boundary disputes can be complicated and you should consult with an attorney.

Boundary Disputes

A boundary dispute occurs when there is a disagreement between neighboring property owners regarding the location of their property lines. A boundary dispute can arise due to many different factors, including unclear or poorly defined property descriptions, conflicting surveys, encroachments, adverse possession claims, or disagreements over boundary lines established by previous owners. Identifying the underlying causes is crucial in formulating an effective resolution strategy.

Common Causes:

Encroachments: Physical encroachments occur when a structure, fence, or other improvements extend beyond the property lines. This can lead to conflicts over the use of land. Encroachment issues may involve negotiations between property owners, adjustments to property lines, or even removal of the encroaching structure to resolve the issue at hand.
Adverse Possession Claims: Adverse possession occurs when someone openly and continuously uses another person’s land without permission for a specified period. This can result in a legal claim to acquire title to the area.
Survey Discrepancies: Discrepancies or errors in property surveys can lead to a boundary dispute. These discrepancies may occur due to outdated surveys, measurement errors, or changes in property lines over time.

Resolution Strategies:

Professional land surveys: property surveys and inspections provide objective data that can be used to resolve disputes by accurately determining boundaries and identifying any encroachments or discrepancies.
Mediation and negotiation: A neutral mediator can assist in finding common ground and reaching a settlement without resorting to lengthy legal processes.
Legal action and boundary line agreements: Parties can enter into a formal agreement to establish a clear boundary line agreement. This agreement prevents possible future disputes and provides a legally binding resolution. Seeking guidance from a contract dispute lawyer can be instrumental in navigating and resolving such matters effectively.

The Impact on Real Estate Contracts

Whenever real estate contracts are not carefully executed or when disputes arise, various consequences for both buyers and sellers can rise as a result. Here are some potential consequences:

Delayed transactions: Disputes over terms, conditions, or issues with the property title or inspection results can lead to delays in the closing process. This delay can affect both parties’ timelines and plans.
Financing challenges: Title and boundary disputes, unexpected repairs, or issues discovered during the inspection can cause additional expenses for either the buyer or seller. The financial burden may lead to renegotiations or even contract termination.
Legal complications: Failure to address issues related to property descriptions, boundaries, or other contract terms can lead to legal disputes. This may involve litigation, with potential legal costs and the risk of court-ordered remedies.
Diminished property value: Any unexpected issues during a real estate transaction, such as structural problems or environmental hazards, it can lead to a decreased perceived value of the property. This can affect the final sale price and the return on investment for the seller.

Tips for Buyers and Sellers:

Clear Contract Language: Ensure that the real estate contract contains clear and precise language regarding property descriptions, boundaries, and any specific conditions or contingencies to avoid any disputes.
Professional Assistance: Engage the services of experienced real estate professionals, including lawyers, real estate agents, and surveyors. Their expertise can help identify and address potential issues early in the transaction process to prevent any potential issues in the future.
Escrow Services: Utilize escrow services to hold funds until all contractual obligations are met. This ensures a secure and controlled transfer of ownership, reducing the risk of disputes.
Public Records Review: Verify public records for any and all historical disputes or legal actions related to the property. This information can provide insights into potential challenges.
Community and Zoning Regulations: Understand local zoning regulations and community rules. Changes in land use or property development can impact boundaries and lead to disputes.
Neighbor Communication: Establish open communication with neighbors to address any concerns or potential boundary issues early on. A collaborative approach can prevent disputes from escalating.
Survey and Inspection Contingencies: Include contingencies in the contract that allow for professional surveys and inspections. This provides an opportunity to identify and resolve boundary discrepancies before finalizing the transaction.
Legal Review: Seek legal advice from a contract dispute lawyer before finalizing any real estate transaction. A legal professional can review contracts, identify potential issues, and provide guidance on mitigating risks.
Stay Informed: Stay updated on any changes in real estate laws and regulations. Awareness of legal developments can help you navigate transactions with greater confidence.
Document Everything: Keep detailed records of all communications, agreements, and transactions. Documentation is important as it can be used as evidence in case of disputes to help protect your interests. By incorporating these practical measures into your real estate transactions, you can minimize the risk of title and boundary disputes and ensure a smoother and more secure property transfer process.

Legal Recourse

At Valero Law Firm PLLC we represent buyers and sellers in quiet title actions. We advise sellers and buyers about all different phases of a sale/purchase including the sales agreement, financing, inspection, title insurance, settlement, and all legal claims. Contact us today for a free consultation.

Conclusion:

In the complex world of real estate contracts, title and boundary disputes are challenges that require attentive navigation and legal assistance in some cases. By understanding the causes, preventive measures, and seeking professional guidance when needed, both buyers and sellers can ensure easy and smooth transactions to protect their investments. When title disputes arise, it is critical for the parties involved to attempt to negotiate a solution. However, sometimes title and boundary disputes can only be solved in court.