Biggest Deed Slip-Ups (and How Not to Make Them)

Mistakes happen. When they happen to a deed, they can go unnoticed for a long time — sometimes leaving a clouded title through a chain of owners.

But at some point, a deed mistake catches up to an owner, buyer, or heir.

So, let’s take a look at 8 common homeowner deed mistakes, and how to avoid them.

Whoops #1. Not Reading the Deed.

After closing, look for your new deed and review it. Your deed is proof of ownership. It also shows how your ownership will go to someone else after your life. More on that in a bit.

Look for the typos that can creep into property deeds during transfers. Look for small details out of whack. Legal names could be missing; maybe someone’s nickname appears instead. Addresses can be off by one or two numbers or letters. Wrong dates can be entered into the system. And so forth.

Clerical bloopers can slip through title searches. If you find something like this, it’s usually a good move to file a corrective deed.

Whoops #2. Not Fixing an Incorrect Legal Description.

All property deeds include a legal description of the boundaries of a property. This description normally gets copied over whenever one owner transfers the deed to the next. Typos sometimes creep in.

Changes in boundaries also throw off the accuracy of deeds. Problems can go unnoticed for some time from owner to owner.

When you become an owner of property, get familiar with your deed. Do its written details match what’s in the inspector’s and appraiser’s reports, and listing information? Discrepancies could highlight a mistake in copying the legal description.

For harmless errors such as misspelled or incomplete names, the solution could be a corrective deed or a quitclaim deed.

Whoops #3. Not Recording the Deed.

What is recording a deed? Recording a deed involves submitting it for the public record with the county or city deed recorder’s office.

Is the deed valid if it’s transferred but not recorded? Yes, but recording is important to give the public notice of the ownership of the property. Otherwise, the owner named on the public record could actually be someone who’s already handed the deed over to an unnamed party.  

So, when a deed is left unrecorded, expect confusion down the road. Worst-case scenario? Someone could sell the home with a different deed and record that later deed. Then two parties think they own the same property. It happens.

When you acquire a deed, be sure it’s complete and error-free — and recorded, too.

Our deed forms are designed and regularly updated to meet legal requirements to transfer the property in your state and county.

Whoops #4. Losing Track of Heirs to the Title.

Now and then when a property owner dies, an heir gets passed over. What if such an heir turns up one day (a blast from the past!) claiming a property interest?

With developments in heir-tracing technology, we could be seeing more such claims. Some surprise claims have legs. It all depends on how state law interacts with the facts of the case. For the innocent deed holder, that can lead to a trip to the courthouse for a quiet title action.

Are you becoming a deed holder? Consider buying owner’s title insurance. For a one-time premium at closing time, it offers protection from certain claims that have fallen through the cracks. (An owner’s title insurance policy, which is optional, is not the title policy that covers a mortgage lender.)

Is title insurance a junk fee? Learn more and decide for yourself.

Whoops #5. Impersonations and Forgeries

A notary witnesses signatures going onto legal documents. But unless the state law says otherwise, notaries don’t verify a signer’s ID. Deed forgery can occur.

A deed holder wouldn’t necessarily have reason to know a signature was faked. Nor, for that matter, would it be obvious that someone in the title history transferred the deed under pressure, or without full understanding. Impersonations and concocted paperwork sometimes even find their way to a closing table without being discovered.

This one is tricky. How would you notice a forgery in a past deed in the chain? Here again, selecting a robust owner’s title policy may be your best bet.

Whoops #6 Adding Names Merely to Avoid Probate

Many people add others’ names to their deeds to keep the home out of probate. Some bring on adult children, giving them vested rights.  

When you add someone else’s name to your deed, go over the possible consequences. Like these:

• The new co-owner gets a say in whether you can sell or take a loan out against the home.

• Your new co-owner’s debts or late payments may impact your title if the creditor files a lien on your co-owned home.

• Signing a deed over to yourself and a co-owner could mean capital gains tax that using a will could have avoided.

Speaking of taxes, check whether any local property tax rules apply to your transfer. And be sure any homestead exemption you requested stays in place.

Whoops #7. Incorrect Vesting

And speaking of co-owners…

There are different types of co-ownership. You choose one when you vest your deed. 

For example, when a deed declares the new co-owner has rights of survivorship, then when one owner passes away, the surviving co-owners now own the property. But when co-owners are on a deed as tenants in common, then when one owner passes away, their share gets probated. That makes the surviving co-owner now also a co-owner with the deceased owner’s beneficiaries.

If that’s not what everyone expects, it might be time to quitclaim the deed to fix the issue. For individualized advice on this point, consult a real estate or wills & trusts lawyer in your state.

Whoops #8. Jeopardizing Medicaid Eligibility

Bringing someone onto the deed to a primary residence could be considered a transfer of your homeownership. So, transferring an interest in your home to a loved one or a nonprofit can have an unintended consequence. It can jeopardize your eligibility for nursing home care which you might need later. After transferring a deed, most homeowners wait out a five year “look-back” period before they may apply for Medicaid.  

But if your spouse or dependent lives with you in the home, your state can’t place a lien on your home to recover nursing home costs. (If the spouse or dependent moves out, the state might attempt to record a lien.)

Medicaid is run at the state level. State-based legal experts on Medicaid guide deed holders in advance of a deed transfer, and if/when Medicaid assistance becomes necessary.

Some people deed their homes to trusts to keep them in the family. Legally this makes a trust the property owner. They should be sure their insurance policies name the trust.

Safety First: Preventing Common Deed Slip-ups

If you’re transferring a deed yourself, you can consult with a title company to check your title. Title companies have attorneys that work out ownership disagreements, old liens or permit issues, and the like. Attorneys can also file corrections.

Important note: We do not provide legal advice. The information on this website is general information, and may not apply in specific states or individual situations. When in doubt about your rights or responsibilities as a deed holder, contact a lawyer with a good reputation, who’s admitted to the Bar in your state.