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3 situations that may lead to title disputes in New Jersey

On Behalf of | Jan 23, 2024 | Title Disputes

When someone buys a home or another piece of real property in New Jersey, what they pay for is the title to the property. New Jersey state authorities on the county level maintain clear records about the title history for a property to help ensure there are no unnecessary conflicts related to someone’s ownership interest in real property.

Despite county recorder’s offices maintaining records of recorded deeds, liens and even easements, title disputes can still crop up during real estate transactions or seemingly out of the blue when someone has already owned a property for years. Title disputes can lead to lengthy court proceedings and put someone’s ownership of a property at risk. The following are some of the leading causes of title disputes in New Jersey.

Improper estate administration

Many people pass their ownership interest in a property to their family members when they die. Their real property becomes part of their estate and transfers either to their heirs if they did not leave an estate plan or specific beneficiaries if they left behind clear instructions about what should happen with their assets. Mistakes during the estate administration process, including a failure to locate beneficiaries or uphold their right of first refusal, might eventually lead to claims against the property in the future.

Divorce complications

When people own property together during a marriage, they have to discuss dividing that property when they divorce. Many couples fight over the best way to handle real property. In some cases, one spouse keeps the home the other receives an appropriate amount of the equity when the person keeping the home refinances. If the party assuming ownership of the home does not refinance in a timely manner, then the other spouse might refuse to sign a deed until they know that the refinancing is underway. The failure to refinance in accordance with a divorce decree could lead to title challenges later.

Property fraud

There are some people who try to trick others into transferring money for a real estate transaction by executing a fraudulent deed. Someone who does not currently have an ownership interest in a property could claim that they do and sign a quit claim deed granting their non-existing interest in the property to an aspiring buyer. In some cases, the fraudulent actor might even pretend to be the current owner on record at the property. Such scenarios might lead to complicated legal claims brought by someone who thought they purchased the property but, in reality, lost money to someone who had no actual right to sell the property to them.

Title issues can also arise due to liens and easements or property tax challenges. As a result of all of these potential complications, checking the title history for a property before purchasing it and reviewing title records before listing a property may help people minimize the chances of title complications later.