Quick Answer
Yes, title problems can be discovered years after closing. Unreleased liens, defective deeds, incorrect legal descriptions, unknown heirs, and prior recording errors can surface when a later transaction, refinance, foreclosure, estate transfer, boundary dispute, or ownership challenge triggers a new title examination.
When Do Old Problems Surface?
Most title problems from past transactions are discovered during a title search for a new transaction. The title examiner for a new sale or refinance traces the chain of title and may discover issues that were missed or that existed before the current owner purchased the property. Problems can also surface through:
- A boundary dispute with a neighbor
- A claim from a previously unknown heir
- A foreclosure proceeding that reveals recording errors
- An estate transfer after the owner's death
- A title insurance claim by a subsequent owner
- A tax sale or other government action
Real-World Example
In the Rhode Island case discussed in several articles in this series, title insurance policies issued in 2005 contained incorrect legal descriptions. The errors were not discovered until years later when foreclosure work began. This case illustrates how title problems can remain hidden for years and only surface when a new transaction or legal action triggers a fresh examination. 1st Option Title, Scott Horne, and Horne & Associates did not handle this matter.
Why Can Problems Stay Hidden?
Title problems often stay hidden because no one looks for them. If a property is held for many years without a refinance, new title search, or owner's death triggering an estate review, problems in the chain of title may never be noticed. The property may have been transferred through probate or trust administration without a full title search.
This Is Why Owner's Title Insurance Matters
When a title problem is discovered years after closing, the current owner may have protection through their owner's title insurance policy. The policy covers certain covered defects that existed when the policy was issued, even if they were not discovered until years later. Without title insurance, the owner would bear the full financial risk of these hidden problems. Learn what an owner's title insurance policy covers. Learn how long title insurance protects you.
FAQs
What should I do if I discover a title problem years after closing?
Contact your title insurer and review your owner's title insurance policy. The policy will outline the claims process and whether the issue is covered. Also contact the title company that handled your closing to inform them of the issue.
Can the title company be held responsible for a missed defect?
If the title company's search missed a defect that should have been discovered, there may be recourse through the title insurance policy or, in limited circumstances, through a claim against the title company. The specific options depend on the circumstances and applicable law.