Nearly one in five U.S. homeowners—19%—say they either do not have, or are unsure whether they have, a clear title and properly recorded deed to their home, according to a recent Federal Home Loan Bank of Atlanta survey.
Most homeowners rarely think about their deed or title records. They pay the mortgage, property taxes and insurance and assume their ownership is properly documented.
Unfortunately, that is not always the case.
A deed identifies how ownership of a property was transferred, while the title reflects the legal ownership rights connected to the property. Errors, missing documents, unresolved estates and unauthorized filings can create serious problems—sometimes without the homeowner realizing it.
Data BI Design helps homeowners examine publicly available property records, identify potential ownership discrepancies and monitor for changes that could signal title fraud or another problem. Discovering an issue early can make it easier and less expensive to address.
What Is a Tangled Title?
A “tangled title” generally describes a situation in which someone occupies, maintains or pays expenses for a home but is not properly identified as its legal owner in the public property records.
This frequently happens when a homeowner dies and the property is informally passed to children or other relatives without completing probate or recording a new deed.
The family may continue living in the home, paying the property taxes and maintaining it for many years. Because nothing immediately forces them to update the ownership records, they may assume the property automatically belongs to them.
Legally, however, the deceased owner may remain listed in the public records.
Ownership can become even more complicated as additional family members die, marry, divorce or have children. Over time, legal interests in the property may be divided among numerous heirs, some of whom may be difficult to locate.
Data BI Design can help review the recorded ownership information associated with a property and identify warning signs such as:
- A deceased person still appearing as the owner
- Ownership records that do not match the current occupant
- Unexpected individuals or entities appearing on a deed
- Multiple heirs with possible ownership interests
- Recently recorded deeds, liens or other property documents
- Mailing-address changes that the homeowner did not request
- Inconsistencies between deed, tax and property-appraiser records
Identifying these issues does not itself resolve the title. Depending on the circumstances, the homeowner may need assistance from a probate, real-estate or title attorney. Data BI Design can, however, help homeowners understand what the public records show and recognize when professional legal assistance may be necessary.
Home Repairs and Assistance Programs Can Expose an Old Title Problem
Many families first discover a tangled title when they need help most.
A homeowner may apply for a homestead exemption, hurricane-repair grant, property-tax benefit, insurance payment, home-equity loan or government assistance program—only to learn that the applicant is not listed as the property’s legal owner.
Some assistance programs require clear title before benefits can be approved. Others may require signatures or consent from every person who inherited an interest in the property.
A family could live in and maintain a home for decades without encountering a problem. But when the roof needs to be replaced, storm damage occurs or foreclosure threatens, the unresolved ownership can suddenly prevent the family from receiving assistance or financing.
Regular property-record reviews through Data BI Design can help uncover these discrepancies before an emergency forces the issue.
Waiting Can Make a Tangled Title More Expensive
The longer an ownership problem remains unresolved, the more complicated it can become.
Pew Charitable Trusts estimated that resolving a relatively straightforward tangled title through probate in Philadelphia could cost approximately $9,198 for a home assessed at $88,800 when subsidized legal assistance or fee waivers were unavailable. That represents more than 10% of the home’s assessed value.
The cost can rise when:
- Several generations of heirs are involved
- Family members disagree about ownership
- An heir cannot be located
- Property taxes, utilities or mortgages are delinquent
- Liens have been recorded
- A foreclosure proceeding has started
- An unauthorized deed has been filed
- The estate requires multiple probate proceedings
Data BI Design’s role is to help identify possible problems in the property data so homeowners can act before the title becomes even more difficult—and potentially more expensive—to correct.
Tangled Titles Can Put Generational Wealth at Risk
With an estimated $124 trillion expected to transfer between generations through 2048, including approximately $105 trillion passing to heirs, properly documented real-estate ownership will become increasingly important.
A home is often a family’s most valuable asset. If ownership is not transferred correctly, the family may be unable to sell, refinance, insure or repair it. Family members can also lose control as the property becomes divided among more heirs.
Research demonstrates the scale of the issue.
A study of Dallas and Tarrant counties identified more than 10,000 single-family heirs’ properties valued at over $2.2 billion. Researchers found that these properties were heavily concentrated in economically disadvantaged neighborhoods.
In Philadelphia, Pew identified at least 10,407 residential properties with tangled titles representing more than $1.1 billion in property value.
The problem can also increase the risk of foreclosure. In the Dallas and Tarrant County study, heirs’ properties accounted for 52% of the tax-foreclosed single-family properties researchers examined in each county.
By helping homeowners review ownership, deed and tax records, Data BI Design seeks to make property information easier to understand and potential problems easier to recognize.
Tangled Titles and Title Fraud Are Different—but Both Require Attention
A tangled title usually results from incomplete inheritance or ownership transfers. Title fraud involves someone improperly using or altering property records for personal gain.
Title fraud may include:
- Forging an owner’s signature on a deed
- Recording a fraudulent quitclaim deed
- Transferring property without the owner’s knowledge
- Using a false identity to obtain a loan against the property
- Changing the owner’s mailing address to intercept notices
- Targeting vacant homes, rental properties or homes owned by seniors
- Exploiting a property whose owner has recently died
No monitoring service can guarantee that title fraud will never occur. However, early detection is extremely important.
Data BI Design can monitor relevant public property information and alert homeowners to certain recorded changes or inconsistencies. An unexpected deed, lien or ownership change can then be investigated before additional damage occurs.
Homeowners should also periodically review their county clerk, recorder, property-appraiser and tax-collector records. If an unauthorized document appears, they should immediately contact the recording office, law enforcement, their title insurer and a qualified real-estate attorney.
Estate Planning Is One of the Best Forms of Prevention
Many tangled-title problems can be prevented through basic estate planning.
Homeowners should consider:
- Preparing a legally valid will
- Establishing a trust when appropriate
- Reviewing how the property is titled
- Confirming that deeds have been properly recorded
- Keeping probate and estate documents organized
- Making sure family members know where important records are stored
- Reviewing property records following a death, marriage or divorce
- Consulting an estate-planning attorney before transferring ownership
A will may help determine who inherits a person’s ownership interest, but it cannot transfer interests already belonging to other relatives. That is why addressing title problems early is so important.
Start by Confirming What the Public Records Show
Homeowners should not wait until they are trying to sell, refinance or repair a home to determine whether the ownership records are correct.
Data BI Design can help review publicly available deed, ownership, tax and property information to identify possible discrepancies. Its property-monitoring services can also help homeowners watch for certain changes that could indicate an unauthorized filing or attempted title fraud.
If a tangled title is discovered, Data BI Design can help organize the relevant property information so the homeowner can more clearly explain the situation to a title company or qualified attorney.
Every homeowner should be able to answer three basic questions:
- Who is currently identified as the legal owner of my home?
- Does the recorded deed accurately reflect how the property is owned?
- Who will legally inherit the property when the current owner dies?
If any answer is unclear, now is the time to investigate.
Protect your home, your family and the wealth you worked to build. Contact Data BI Design to learn more about property-record research and ongoing property monitoring.
Data BI Design provides property-data research and monitoring services. It is not a law firm, title insurer or government recording agency and does not provide legal advice. Potential ownership or title problems should be reviewed by a qualified attorney or title professional.