Title Risks

All sorts of irregularities in the history of the various people who have owned the property since it was originally constructed can affect a property's title. Learn about some causes of these hidden risks to titles:

• Secret spouses: Sometimes a present or former spouse no one knew about will show up out of the blue and file a claim against the property. This explains why title-company representatives are so curious about your marital status. They must know whether you're single, married, divorced, or widowed in order to keep ownership records accurate.
• Undisclosed heirs: When property owners die without wills, probate courts must decide whom their rightful heirs are. Court decisions may not be binding on heirs who weren't notified of the proceeding. Even when there's a will, probate courts must sometimes settle questions concerning the will's interpretation.
• Questionable competency: Minors and people adjudged to be mentally incompetent can't enter into binding contracts unless the transaction is handled by their court-appointed guardians or conservators.
• Human errors: This category covers everything from clerks who overlook liens recorded against property and other important documents while doing title searches, to surveyors who incorrectly establish property boundaries.
• Forgery and fraud: Sellers are sometimes fraudulently impersonated. By the same token, signatures can be forged on documents.
• Name confusion: A lot of title problems are caused by people who have names similar (or identical) to the buyer's name or seller's name. If you have a fairly common last name, you'll probably have to fill out a Statement of Information to help the title company distinguish you from other people with names like yours. If you have an ordinary name like Brown, Chen, Garcia, Gonzalez, Johnson, Jones, Lee, Miller, Nguyen, Williams or Smith, expect to be asked to complete a Statement of Information.

What type of information is requested in a Statement of Information? You (and your spouse if you're married) will have to provide your full name, Social Security number, date and year of birth, birthplace, date and place of marriage (if applicable), residence and employment information, previous marriages, and the like. This information will be used to differentiate others with names similar to yours.