What Happens If the Title Search Discovers a Lien, Judgment, or Ownership Issue?
A title search that uncovers a lien, judgment, or ownership dispute does not necessarily kill the deal — but it does require resolution before closing. Here is how title issues are handled in Florida and what sellers and buyers should expect.
What Happens If the Title Search Discovers a Lien, Judgment, or Ownership Issue?
A title search that uncovers a problem does not automatically kill the deal — but it does require resolution before the title company can issue title insurance and the closing can proceed. Here is how different types of title issues are handled in Florida.
Liens
A lien is a financial claim against the property. Common liens discovered in title searches include:
Mortgage liens: The most common. Paid off from the sale proceeds at closing. The title company requests a payoff statement and wires the funds to the lender.
HOA and condo association liens: Unpaid HOA fees. Paid off from the sale proceeds at closing.
Mechanic's liens: Filed by contractors who were not paid for work on the property. The seller must pay the lien or negotiate a release before closing.
Judgment liens: Court judgments against the property owner attach to all real property in the county. The seller must pay the judgment or negotiate a release.
IRS tax liens: Federal tax liens attach to all property owned by the taxpayer. The IRS lien must be paid from the sale proceeds, or the IRS may agree to discharge the lien for a specific property.
Child support liens: Unpaid child support can result in a lien on Florida real property.
Judgment Liens
A judgment lien is created when a court enters a judgment against a property owner and the judgment is recorded in the county where the property is located. The judgment lien attaches to all real property owned by the judgment debtor in that county.
Resolution: The judgment must be paid off from the sale proceeds at closing, or the judgment creditor must agree to release the lien. The title company will contact the judgment creditor and arrange the payoff.
Ownership Disputes
Ownership disputes are more complex than lien issues. They arise when someone other than the seller claims an ownership interest in the property. Common causes include:
- A prior deed that was improperly executed or recorded
- A property that passed through an estate without proper probate
- A property held in an LLC or trust where the transfer was not properly documented
- A prior owner who claims the deed was forged or obtained by fraud
Resolution: Ownership disputes typically require legal action — a quiet title action — to resolve. A quiet title action is a lawsuit that asks the court to declare the seller's title clear of the competing claim. This can take months and may delay or prevent the closing.
Survey Issues
A survey may reveal that a structure encroaches on a neighboring property or that the property's boundaries differ from what the deed describes. These issues require negotiation with the neighboring property owner or a boundary line adjustment.
What Buyers and Sellers Should Do
Sellers: If the title search identifies an issue, work with the title company and your attorney to resolve it as quickly as possible. Most lien issues can be resolved within the contract period.
Buyers: If the title search identifies an issue that cannot be resolved before closing, you have the right to cancel the contract and receive your earnest money back.
FAQ
How long does it take to resolve a title issue in Florida?
Simple lien issues (mortgage payoffs, HOA liens) can typically be resolved within days. Complex issues (judgment liens, ownership disputes) may take weeks or months.
Can I close on a property with an unresolved title issue?
No. The title company will not issue title insurance — and the closing cannot proceed — until all title issues are resolved.
What if the title issue cannot be resolved?
If a title issue cannot be resolved before closing, the buyer typically has the right to cancel the contract and receive their earnest money back.
Questions about title issues in your Emerald Coast transaction? I work with experienced title companies and real estate attorneys who handle these situations regularly.
— Kinsey Haddock P.A., Broker Associate | Coldwell Banker Realty — Panhandle | License #BK3253849
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Written by
Kinsey Haddock P.A.Kinsey Haddock P.A. is a Broker Associate and REALTOR® with Coldwell Banker Realty, specializing in coastal real estate across the entire Florida Panhandle — from St. George Island and the Forgotten Coast to Panama City Beach, Scenic Highway 30A, and Destin.