You’ve made it through negotiations, inspections and financing, and closing day is finally approaching. Then a title issue appears. Title issues can delay a real estate closing in Florida when additional documentation, payoffs, releases or legal review are needed before the transaction can move forward.
While some title problems are relatively simple to resolve, others may require additional documents, payoffs, legal assistance or coordination between several parties before the transaction can move forward.
A title search reviews public records and documents that may affect ownership of a property. In Florida, a title search can reveal matters such as prior mortgages, judgments, tax liens, easements, restrictions and other potential defects that may need to be addressed before title insurance can be issued.
Here are seven common issues that can cause delays, and why identifying them early matters.
1. Unresolved Liens
One of the most common title issues involves liens attached to the property. These may include:
- Judgment liens
- Tax liens
- Contractor or construction liens
- Prior mortgages
- Other recorded claims against the property
A lien generally needs to be reviewed and, when required, properly satisfied or addressed before a clear transfer of title can take place.
The Florida Department of Financial Services specifically identifies prior recorded mortgages, judgment liens and tax liens as examples of defects that may affect title.
Why early title work matters: The sooner an issue is discovered, the more time the parties have to obtain payoff information, documentation or recorded satisfactions before closing day.
2. Missing Mortgage Satisfactions
Paying off a mortgage does not always mean the public records immediately reflect that payoff.
Occasionally, an older mortgage may still appear in the property records because the satisfaction or release was never properly recorded.
That can create questions about whether the previous lender still has an interest in the property.
A title professional can research the matter and work with the appropriate parties to obtain the documentation needed to clear the issue.
3. HOA or Association Issues
Properties located within homeowners’ associations or condominium associations may require additional documentation before closing. Outstanding assessments, balances, association requirements or missing information can create unexpected complications when discovered late in the transaction.
For REALTORS®, sellers and buyers, providing HOA or condominium information early can help the closing team begin requesting the necessary documentation without waiting until the final days before closing.
4. Open Permits and Municipal Issues
Unresolved permits, code violations and other municipal matters can also create complications during a real estate transaction. Depending on the property and transaction, additional research may be performed to identify items that need attention before closing.
For sellers, addressing known property or permit issues before the home goes under contract can help reduce last-minute surprises. For buyers, it provides an additional opportunity to understand matters associated with the property they are purchasing.
5. Probate or a Deceased Property Owner
When a property owner has passed away, determining who has legal authority to sell the property can become more complicated. The transaction does not necessarily have to stop, but the appropriate estate, probate and title requirements need to be addressed.
Florida Realtors notes that the death of an owner during a transaction does not automatically prevent the sale, although determining who has authority to proceed may require a probate attorney and assistance from real estate or title professionals.
These situations are another reason to involve the title company early rather than waiting until closing is approaching.
6. Name or Ownership Discrepancies
Even something that appears small can create additional work. Differences involving:
- Legal names
- Married or previous names
- Trusts
- LLCs or corporations
- Prior owners
- Incorrectly recorded documents
may require clarification or additional documentation.
The purpose is to make sure the individuals or entities transferring ownership have the proper authority to do so and that the new documents are prepared correctly. Providing accurate names and ownership information from the beginning of the transaction can make this process significantly easier.
7. Easements, Restrictions or Other Title Exceptions
A title search can also reveal easements, restrictions, covenants or other recorded matters affecting the property. An easement, for example, may give another person or entity certain rights involving part of the property. Restrictions or covenants may place limitations on how a property can be used.
These items do not automatically mean a transaction cannot close, but buyers should understand the matters that affect their property and the exceptions that may appear in their title insurance policy.
What Does a Title Company Do Before Closing?
A title company does much more than simply prepare documents for closing. The title process can include reviewing title search records, identifying requirements that must be satisfied, clearing underwriting issues, preparing the title commitment, coordinating documentation, handling escrow funds, conducting the closing and issuing title insurance.
Florida’s Department of Financial Services describes primary title services as including the evaluation of title search records, clearing underwriting obstacles, determining insurability and preparing the title commitment and policy.
The goal is to identify potential problems before they become closing-day problems.
How Can REALTORS® and Sellers Help Prevent Closing Delays?
Preparation makes a big difference. If you are preparing for a Florida real estate transaction, try to provide your title company with complete information as early as possible, including details about:
- Existing mortgages
- HOA or condominium associations
- Marital status
- Trusts or business entities involved in ownership
- Deceased owners or probate situations
- Known liens or judgments
- Recent construction or property improvements
If you already know there may be a title issue, don’t wait until the week of closing to mention it. Early communication gives everyone more time to work toward a solution.
A Smooth Closing Starts Before Closing Day
Many closing delays aren’t caused by problems that appear overnight. They are caused by issues that existed before the property ever went under contract but were not discovered or addressed until later. That’s why working with an experienced title team early in the transaction matters.
At Smart International Title, we work with buyers, sellers, REALTORS® and investors to identify potential title issues, coordinate the closing process and help keep transactions moving toward the closing table.
Whether you’re preparing a new listing, already under contract or have questions about a challenging transaction, our team is here to help.
Frequently Asked Questions About Florida Title Issues
Can a lien delay a real estate closing in Florida?
Yes. A recorded lien may need to be reviewed, satisfied, released or otherwise addressed before the title can be cleared and the transaction can move forward.
Do title issues always prevent a closing?
No. Many title issues can be resolved, but the amount of time required depends on the type of issue, the documents needed and the parties involved.
Can open permits affect a Florida real estate closing?
They can. Depending on the property and transaction, open permits, code violations or other municipal matters may need additional review before closing.
What happens if a property owner dies before closing?
The transaction does not automatically have to end, but the appropriate person must have legal authority to proceed. A probate attorney, title professional or real estate attorney may need to be involved depending on the circumstances. Florida Realtors recently reiterated that an owner’s death can complicate a sale without necessarily stopping it.
Why is it important to start title work early?
Starting early gives the parties more time to identify and address liens, ownership questions, missing releases, probate matters and other issues before closing day.
Ready for Your Next Closing?
Need help with a Florida real estate closing? Our team can help identify potential title issues early, coordinate the closing process and keep your transaction moving forward. Contact us:
Smart International Title
Serving Kissimmee, Orlando and clients throughout Florida.
Visit: www.smartinternationaltitle.com
We Care About You.
This article is provided for general educational purposes and is not legal advice. Probate, estate, and Florida homestead matters can vary significantly based on individual circumstances. Consult a qualified Florida attorney for advice regarding a specific estate or legal matter.