What Happens If a Property Title Issue Delays Closing?

Issues with the title of a property can cause big delays. Talk to a residential real estate lawyer with experience here in Long Island, N​Y right from the beginning, so you can have confidence that the title is clear. And if you’re already in the midst of a mess, a lawyer can help you sort through it as quickly as possible. Here’s what to expect.

What Happens If a Property Title Issue Delays Closing in the Long Island, NY Area?

Transaction Limbo

When there’s an issue with the title, everything enters a state of limbo and uncertainty. Ownership cannot transfer when the title is not clear because the owner now cannot legally pass on full rights to the property. And because lenders are very protective of their investments, they typically won’t give a mortgage loan until this problem gets fixed. Things can be paused like this for days, weeks, and sometimes even for months. It all depends on how serious and complicated the issue is.

Penalties and Negotiation

Your real estate contract will include a closing date, which is usually expressed as “on or about” a certain day. In practical application, this usually means you have 30 days past that date to get things worked out. But if that delay continues for too long, there may be penalties outlined in your contract. If the seller can’t get the title issue fixed pretty quickly, they will often enter into negotiations, because if both parties agree, that closing date can be pushed off a bit.

End Result

The end result depends on whether the title issue can be fixed. If it can, hopefully the sale goes through and in a timely fashion. If it can’t, then the worst-case scenario is that the sale falls through. The best way to avoid the issue in the first place is to work with a real estate attorney who can investigate the title thoroughly right from the beginning.

How Title Issues Get Fixed

There are a variety of possible title issues, so the fix depends on what kind of issue you encounter. In some cases, you may have to pay an outstanding claim against the property, after which there will be a formal release recorded with the county clerk. In other cases, documentation is wrong and needs to be corrected. And in yet other cases, you may have to hire a surveyor to clarify where the boundaries of the property are.

Sometimes the primary fix is just negotiation. If the issue on the title is minor, such as an easement intruding farther into the property than was originally advertised, then the buyer and seller may be able to negotiate for new terms that will allow the sale to just go through.

Talk to a Long Island Residential Real Estate Lawyer Today

Wherever you are in the process, it’s always in your best interests to get sound legal advice. Contact Chiariello & Chiariello in Glen Cove, NY today to get advice on your situation and experienced representation to protect your interests.

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