Defective Title

One of the red flags with real estate ads is when the asking price is significantly below market. If the property does not need major renovation, it may have issues, such as needing to be brought up to building code compliance, a tax lien may need to be paid off, a judgment against the property may have been entered to prevent certain types of renovations, or there could be an estate dispute over the title. In any of these scenarios, the property is said to have a defective title, i.e., it cannot be cleanly and legally transferred to another party as it currently stands. Defective title can also apply to other assets, such as mobile homes, vehicles, and others.

The old maxim: “If it’s too good to be true, it’s because it ain’t” is accurate for a reason. A defective title is one of then.