Title searches should always be done prior to closing
Dear Mr. Feichthaler:
We are in the process of selling our home, and buying a new home on water. The new home is owned by friends of ours, so we decided not to use a law firm or title company. We will just pay our friends the money and they will deed the property to us. Will this be OK?
— Sam and Katherine B.
Dear Sam and Katherine:
We frequently handle transactions between friends here, and we always recommend title searches are completed prior to closing. Of course, your friends would not intentionally transfer you property that has title issues, but they may not be aware of them. Issues like prior mortgages, IRS liens or defective deeds in the chain of title could impair the property now and in the future.
For example, if you buy the property today and you determine years for now you don’t have clear title, what will you do? Ask your friends for the money back, if they have it? At a minimum, you will likely find yourself in court in a “quiet title” action, and hope that the judge determines the property is rightfully yours.
While true that these types of situations are not frequent, they happen enough that I would never purchase a property without title insurance. The bulk of costs are typically commission paid by the seller, and it sounds like this will not be payable in this transaction. And, in Lee County, the seller typically pays for the costs of title search and the owner’s title policy that will be issued to you as buyer. Especially with a transaction of this monetary magnitude, safety first.
Eric P. Feichthaler has lived in Cape Coral for over 33 years and graduated from Mariner High School in Cape Coral. After completing law school at Georgetown University in Washington, D.C., he returned to Southwest Florida to practice law and raise a family. He served as mayor of Cape Coral from 2005-2008, and continues his service to the community through the Cape Coral Caring Center, Cape Coral Historical Museum, and Cape Coral Kiwanis. He has been married to his wife, Mary, for over 20 years, and they have four children together. He earned his board certification in Real Estate Law from the Florida Bar. He is AV Preeminent rated by Martindale-Hubbell for professional ethics and legal ability, and is a Supreme Court Certified Circuit Civil Mediator.
Mr. Feichthaler can be reached at email@example.com, or (239) 542-4733.
This article is general in nature and not intended as legal advice to anyone. Individuals should seek legal counsel before acting on any matter of legal rights and obligations.