Common Title Issues That Can Delay Your Closing

You've found your dream home, negotiated a great price, and scheduled your closing for three weeks from now. Then your title company calls with concerning news: the title search has uncovered issues that need to be resolved before you can close. Your first reaction might be panic, but take a deep breath—title problems are more common than you think, and most are completely resolvable.

At Prospect Title Insurance Agency, we've been handling Utah real estate transactions since 1967, and we've seen every title issue imaginable. While some problems are more complex than others, the vast majority can be cleared with proper attention and expertise, allowing your transaction to proceed smoothly.

In this comprehensive guide, we'll walk through the ten most common title issues encountered in Utah real estate, explain how each problem is resolved, share real-world examples from our decades of experience, and provide actionable tips to prevent these issues from derailing your closing. Whether you're buying your first home or you're a seasoned investor, understanding these common challenges helps you navigate the title process with confidence.

What Are Title Issues and Why Do They Matter?

Before diving into specific problems, it's important to understand what we mean by "title issues" and why they can't simply be ignored.

A title issue (also called a title defect, cloud on title, or encumbrance) is any claim, lien, error, or other problem that affects the legal ownership of property or limits your rights as the owner. These issues matter because they can prevent you from obtaining clear, marketable title—the legal standard that means you own the property free from claims by others and can sell it in the future without complications.

Title issues fall into several categories:

• Financial liens are claims against the property for unpaid debts like mortgages, taxes, or contractor bills
• Ownership defects are problems with who legally owns the property, such as missing heirs or forged documents
• Legal errors include mistakes in deeds, surveys, or public records
• Use restrictions are limitations on how you can use the property, like easements or covenants
• Boundary problems involve disputes over property lines or encroachments

The good news is that most title issues are routine situations that experienced title companies handle regularly. At Prospect Title, we have established relationships with lenders, contractors, HOAs, and county offices that help us resolve problems efficiently. We know the proper procedures for each type of issue and can often clear multiple problems simultaneously.

Issue #1: Unpaid Property Taxes

Unpaid property taxes are one of the most frequent title issues we encounter, particularly when sellers are experiencing financial difficulties or during estate sales where taxes may have accumulated while the property sat empty.

Why this is serious: In Utah, property tax liens take priority over virtually all other liens, including mortgages. This means the county can foreclose on the property to collect unpaid taxes, regardless of what you paid for the home or whether you knew about the tax debt. Property tax liens can accumulate penalties and interest, growing substantially over time.

How it's discovered: Title examiners check county tax records as a standard part of every search. They verify whether all property taxes are current and identify any unpaid balances, special assessments, or tax liens. Most Utah counties now have online tax portals that allow quick verification of tax status.

How it's resolved: Property taxes are typically paid from the seller's proceeds at closing. The title company obtains a current tax payoff amount from the county treasurer, includes this amount in the settlement statement as a debit to the seller, and ensures payment is made before or at closing. If the amount is substantial, it may reduce the seller's net proceeds to the point where they need to bring additional funds to closing.

Real example: A Salt Lake County home sale nearly fell apart when we discovered $8,200 in unpaid property taxes spanning three years. The seller had fallen behind during a medical crisis. We obtained a payoff quote from the county, included the full amount in the closing settlement as a seller debt, and coordinated electronic payment to the county on closing day. The buyer received clear title with no tax liability.

Prevention tips: If you're the buyer, the preliminary title report will show any tax liens, giving you advance warning. If you're concerned about the seller's financial situation, you can check property tax status yourself through the county treasurer's website before making an offer. Ensure your purchase contract specifies that all taxes must be current at closing.

Issue #2: Mechanic's Liens

Mechanic's liens are filed by contractors, subcontractors, or suppliers who performed work or provided materials for the property but weren't paid. These liens are particularly problematic because they can be filed up to 180 days after work is completed in Utah, creating a gap between when work is done and when a lien might appear.

Why this is serious: A valid mechanic's lien gives the contractor a security interest in the property, allowing them to potentially force a sale to recover their payment. Even if the seller (not you) hired the contractor and the work was done before you bought the property, the lien attaches to the property itself and could become your problem if not properly addressed.

How it's discovered: Title examiners search the county recorder's mechanic's lien index and review recent recordings to identify filed liens. They also look for preliminary notices, which contractors file to preserve their right to file a lien later. During the transaction, the title company may ask the seller about recent improvements or repairs to identify potential lien risks.

How it's resolved: If the lien is valid and the amount is not disputed, the simplest solution is payment at closing from the seller's proceeds. The title company obtains a lien release from the contractor in exchange for payment. If the lien amount is disputed or the lien is invalid, the seller may need to bond around the lien (posting a bond that substitutes for the lien) or negotiate a settlement with the contractor. In some cases, the parties dispute the lien in court, though this typically delays closing significantly.

Real example: We handled a Park City condo sale where a $15,000 mechanic's lien appeared from a roofing contractor. The seller claimed the HOA should have paid the roofer from HOA funds, not the individual unit owner. After reviewing the HOA's CC&Rs and discussing with the HOA attorney, we determined the seller was responsible. We negotiated a $12,500 settlement with the contractor, paid at closing, and obtained a full lien release. The closing was delayed by 10 days but ultimately completed successfully.

Prevention tips: If you're buying a property where the seller recently completed renovations or repairs, ask for documentation that contractors were paid in full and request lien releases before closing. Consider adding a contingency requiring the seller to provide proof that all work was paid for. Be aware that title insurance policies typically include a gap exception for mechanic's liens that could be filed after closing for work completed before closing—this is a standard industry practice because liens can be filed months after work is done.

Issue #3: Unreleased Mortgages

When a property owner pays off a mortgage, the lender is supposed to record a release (also called a reconveyance in Utah) with the county recorder, removing the mortgage lien from the property. Sometimes, this doesn't happen. The mortgage was paid years ago, but the release was never filed, so it still appears as a lien during the title search.

Why this is serious: An unreleased mortgage appears to subsequent buyers and lenders as an outstanding debt against the property. No new lender will loan money on a property with another mortgage apparently still in place. Even though the mortgage was actually paid off, the public record doesn't reflect this, creating a cloud on the title.

How it's discovered: During the title search, examiners review all recorded mortgages and check whether corresponding releases were filed. If they find a mortgage from 2008 but no release document, it's flagged as an issue requiring investigation. The examiner then researches whether the mortgage was actually paid off.

How it's resolved: The title company contacts the lender (now often a different servicer or even a defunct company) and requests a belated release. If the seller can provide proof of payoff (old bank statements, payoff letters, canceled checks), this facilitates the process. The lender reviews their records, confirms the loan was satisfied, and records a release. If the original lender is out of business or can't be located, the title company may use an affidavit process or quiet title action to clear the lien, though this takes longer.

Real example: A Provo home sale revealed a mortgage from 2005 that was never released. The seller had refinanced in 2005, paying off the original mortgage, but the lender (now merged with another bank) never recorded the release. We contacted the successor bank, provided documentation of the payoff, and they issued a belated release that we recorded before closing. The process took 12 days but didn't delay the closing because we caught it early in the escrow period.

Prevention tips: If you're selling a property, verify that all previous mortgages were properly released before listing your home. You can check county recorder records online in most Utah counties. If you discover an unreleased mortgage, contact your title company or attorney immediately to begin the release process—don't wait until you have a buyer. If you're refinancing or paying off a mortgage, follow up after 60 days to confirm the release was recorded.

Issue #4: Judgment Liens

Judgment liens arise when someone sues the property owner, wins the case, and records the judgment with the county recorder. Once recorded, the judgment becomes a lien against all real property owned by the debtor in that county. These liens are common in divorce proceedings, creditor lawsuits, HOA disputes, and collection actions.

Why this is serious: Judgment liens in Utah remain valid for eight years from the date of recording and can be renewed for additional eight-year periods. They must typically be paid in full before the property can be sold with clear title. The judgment amount often includes the original debt plus accumulated interest, attorney fees, and court costs, making it significantly higher than the original amount owed.

How it's discovered: Title examiners search judgment indexes under the names of all current and recent property owners. They search not just the county where the property is located but also other Utah counties where the owner might have lived. They also check federal court records for federal judgments, which can attach to property statewide.

How it's resolved: If the judgment is valid and the amount is accepted, it's paid from the seller's proceeds at closing. The title company contacts the judgment creditor or their attorney, obtains a payoff amount including all interest and fees through the closing date, includes this amount in the settlement statement, and obtains a satisfaction of judgment that's recorded to clear the lien. If the seller disputes the judgment or the amount, resolution becomes more complex and may require court action.

Real example: An Ogden property sale uncovered three judgment liens totaling $42,000: a $28,000 credit card judgment, a $9,500 medical judgment, and a $4,500 HOA judgment. The seller's net proceeds after the mortgage payoff were only $35,000. We negotiated with all three creditors, ultimately settling the credit card judgment for $18,000, the medical judgment for $7,000, and paying the HOA judgment in full at $4,500 (HOAs rarely negotiate). The reduced total of $29,500 allowed the sale to proceed, with the seller bringing an additional $2,000 to closing to cover other costs.

Prevention tips: If you're buying property from someone you know has had financial troubles, judgments are likely. Request a preliminary title report early so you know what you're dealing with. Ensure your purchase contract requires the seller to clear all judgment liens. If you're the seller with judgments, address them before listing—waiting until you have a buyer reduces your negotiating power with creditors and can cause your deal to fall apart.

Issue #5: Errors in Legal Descriptions

Legal descriptions define property boundaries using metes and bounds, lot and block numbers, or other surveying methods. Errors in these descriptions—even minor ones—can create serious title problems. We've seen misspelled street names, incorrect lot numbers, transposed numbers in coordinates, and descriptions that don't match the actual property.

Why this is serious: If the legal description in your deed doesn't accurately describe the property you think you're buying, you may not legally own what you intended to purchase. A deed with an incorrect legal description might give you ownership of the wrong lot, a portion of the intended property, or in extreme cases, nothing at all. Future title searches will perpetuate the error, creating problems when you try to sell.

How it's discovered: Title examiners compare legal descriptions across multiple documents in the chain of title. They check that the description in the current deed matches previous deeds, verify lot and block numbers against county plat maps, and review surveys when available. Discrepancies between documents are red flags requiring investigation.

How it's resolved: Minor errors (like "West 100 South" instead of "100 West South") can often be corrected through an affidavit or corrective deed explaining the error. More significant errors may require a new survey to determine the correct description, coordination with the county surveyor to verify the intended property, and recording a corrective deed with the proper description. All parties who signed the original incorrect deed typically need to sign the corrective deed.

Real example: A St. George property's deed described it as Lot 12 when it should have been Lot 21—a transposition error from a 1998 sale. The error wasn't caught in subsequent transactions because title companies were working from the previous incorrect description. We discovered the error when our examiner noticed the legal description didn't match the property tax parcel number. We obtained a survey confirming the property was actually Lot 21, prepared a corrective deed signed by all parties in the chain back to 1998 (some now deceased, requiring involvement of their estates), and recorded the corrected description. The process took 28 days and significant effort but was essential to give the buyer clear title to the correct property.

Prevention tips: If you're buying property with a complex or unusual legal description, consider ordering a survey before closing. Compare your deed's legal description to the tax assessor's parcel description—they should match. If you notice any discrepancies between documents, bring them to your title company's attention immediately.

Issue #6: Boundary Disputes and Encroachments

Boundary disputes arise when property owners disagree about where the property line is located. Encroachments occur when a structure, fence, driveway, or other improvement crosses the property line onto a neighbor's land (or vice versa). These issues are common in older neighborhoods where fences were built based on assumptions rather than surveys.

Why this is serious: If you build on what you think is your property but is actually your neighbor's, they can force you to remove the improvement. If your neighbor has built on your land, you may have difficulty using that portion of your property. Adverse possession laws in Utah allow people to claim ownership of land they've openly used for 7-20 years, meaning boundary encroachments can eventually transfer ownership. Lenders often won't loan on properties with known boundary disputes.

How it's discovered: Some boundary issues are revealed during the title search if neighbors have filed boundary dispute lawsuits or adverse possession claims. However, many boundary problems only surface when a survey is ordered. Physical inspections might reveal obvious encroachments like fences clearly not on the property line or garages that appear to cross boundaries. Sellers might disclose known disputes in their property disclosure.

How it's resolved: Resolution depends on the severity and the neighbors' cooperation. Options include obtaining a current survey to definitively establish the true boundary, negotiating boundary line adjustments with the neighbor (requires agreement and recording), obtaining signed agreements acknowledging the encroachment, granting easements to formalize use of encroached areas, removing the encroaching structure to comply with the actual boundary, or filing quiet title actions if agreement can't be reached. The best solution is often a boundary line adjustment, where both neighbors agree to move the legal boundary to match where the fence or structure is located.

Real example: A Sandy home purchase revealed that the seller's detached garage encroached 3 feet onto the neighbor's property, according to a new survey. The garage had been there since 1987, and both neighbors were friendly. We facilitated a boundary line adjustment where the neighbor sold a 10-foot strip of land to the seller for $5,000, moving the property line to encompass the garage. Both parties signed the agreement, we had it surveyed and recorded, and the title was cleared. The process took 6 weeks and cost about $3,500 in surveyor and legal fees, which the seller paid.

Prevention tips: When buying property, walk the boundaries and note where fences, structures, and improvements are located. If anything looks questionable, order a survey before removing your inspection contingency. Ask neighbors if there have ever been boundary disagreements. In Utah, buyers can request that sellers provide a current survey, though this isn't standard practice. For expensive properties or those with visible boundary concerns, the cost of a survey ($500-$1,500) is worthwhile insurance against future problems.

Issue #7: Missing or Unknown Heirs

When a property owner dies, the property passes either through their will (testate) or according to state law (intestate). If the estate wasn't properly probated, or if heirs weren't all located and included, questions about ownership can arise. This is particularly common with properties that have been in families for generations or when distant relatives inherit.

Why this is serious: If an heir wasn't properly included in the probate process or didn't sign necessary documents, they still have an ownership interest in the property. Years or decades later, this heir could surface and claim their share, challenging your ownership. Even good-faith purchasers can lose property to rightful heirs who were excluded from the estate process.

How it's discovered: Title examiners look for gaps in the chain of title where an owner died but there's no probate proceeding or transfer document explaining how the property passed to the next owner. They review probate files to verify all heirs were identified and participated. They check death certificates, wills, and family trees when ownership passed through inheritance. Red flags include properties transferred through quit claim deeds after an owner's death or deeds signed by only some of multiple children.

How it's resolved: If missing heirs can be located, they can sign quit claim deeds releasing their interest. If the estate was never probated, a probate proceeding may be opened (even years after death) to properly transfer title. If heirs can't be located despite diligent effort, a quiet title action may be necessary to legally extinguish their potential claims. Sometimes the title company can insure over the risk if the likelihood of a claim is very low and sufficient time has passed.

Real example: A Cedar City home sale revealed that the property was inherited in 1995 when the owner died intestate (without a will). Probate records showed three children were identified as heirs, but our research discovered there was actually a fourth child from a previous marriage. This child never participated in the estate proceedings and technically still owned a 25% interest in the property. We located the heir living in Arizona, explained the situation, and she signed a quit claim deed releasing her interest in exchange for $15,000 (roughly her 25% share of the $60,000 equity). The closing was delayed 3 weeks, but the issue was resolved and clear title was conveyed.

Prevention tips: When buying property that's been in a family for decades or was recently inherited, ask detailed questions about the estate process. Request copies of probate documents before removing contingencies. If you're inheriting property, work with an attorney to ensure probate is handled correctly and all potential heirs are identified and included. Don't take shortcuts or assume everyone in the family agrees—get proper legal documentation.

Issue #8: Divorce-Related Title Complications

Divorce frequently creates title complications because property often needs to be transferred between spouses, refinanced to remove one party, or sold to divide proceeds. We see issues when divorce decrees don't properly address property transfer, when one spouse was awarded the property but both names remain on the title, or when one spouse refinances but the other doesn't sign off on documents.

Why this is serious: In Utah, property acquired during marriage is presumed to be marital property regardless of whose name is on the title. If property was transferred during or after divorce without the other spouse's consent or proper court authorization, that spouse may still have a claim. When both spouses are on title but only one is selling, the other spouse's consent is typically required even if the divorce decree awarded the property to the selling spouse.

How it's discovered: Title examiners search for divorce records when ownership changes during a timeframe suggesting possible divorce. They look for divorce decrees in the chain of title and review them to understand how property was divided. Warning signs include property transferred to only one spouse while both were on title previously or quit claim deeds signed during divorce proceedings. The examiner verifies that property transfers comply with the divorce decree.

How it's resolved: If the divorce decree awarded the property to one spouse but didn't specifically require the other spouse to sign a quit claim deed, we obtain that quit claim deed now. If the decree is ambiguous about property division, we may need an attorney to review and interpret it. If one spouse refuses to cooperate, the other may need to file a motion with the divorce court to enforce the decree. If property was transferred without proper authority, a corrective deed signed by both ex-spouses may be needed.

Real example: A West Jordan townhome sale involved a seller who was awarded the property in her 2019 divorce. The decree stated she received the townhome, but her ex-husband never signed a quit claim deed removing his name from the title. We contacted the ex-husband through his attorney, and he initially refused to sign, claiming he was entitled to part of the appreciation since the divorce. After review, we determined the decree clearly gave all rights to the seller. Her attorney filed a motion to compel compliance, the judge ordered the ex-husband to sign the quit claim deed, and we completed the closing. The process added 4 weeks to the timeline but resulted in clear title.

Prevention tips: If you're going through divorce and receiving property, ensure the decree specifically requires your ex-spouse to execute and record a quit claim deed. Don't wait until you want to sell—get this done immediately after the divorce is final. If you're buying property from someone recently divorced, ask early in the transaction whether the seller's ex-spouse is on title and if they've signed release documents. Better to know upfront than be surprised during the title search.

How Can You Prevent Title Issues From Delaying Your Closing?

While you can't control whether title issues exist on a property's history, you can take steps to minimize their impact on your transaction timeline.

Order title work immediately when escrow opens. Don't wait. The sooner the title search is completed, the more time you have to address any issues discovered. At Prospect Title, we recommend ordering title on day one of escrow so the preliminary report is available within a week, leaving the remaining 3-4 weeks to resolve problems.

Choose an experienced title company. Not all title companies are equal. Experienced companies like Prospect Title, with 59 years in Utah, have seen every possible issue and know the most efficient resolution paths. We have established relationships with lenders, contractors, county offices, and attorneys that facilitate quick problem-solving. We've developed systems for handling complex situations that newer companies might struggle with.

Review the preliminary title report carefully. When you receive the preliminary report, read it thoroughly with your real estate agent. Ask about anything you don't understand. The report will list all liens and encumbrances, exceptions to coverage, and requirements that must be satisfied before closing. If you see something concerning, raise it immediately rather than assuming the title company will handle it.

Respond quickly to requests from the title company. If your title officer asks for documents, information, or signatures, provide them promptly. Every day you delay in responding adds a day to resolving the issue. If you need the seller to sign something or provide documentation, communicate this urgency to your real estate agent so it's addressed immediately.

Build adequate time into your contract. While 30-day closings are common, 45-day escrow periods provide more cushion for addressing title issues without delaying the closing. If you have flexibility on timing, a longer escrow period gives everyone breathing room. Conversely, if you're in a rush for a quick closing, understand that title issues might make your timeline impossible.

Purchase comprehensive title insurance. Even with a thorough title search, some issues can't be discovered from public records—forged documents, unknown heirs, recording errors, or mistakes in the title examination itself. Title insurance protects you against these hidden defects. Don't skimp on coverage or try to save money by reducing your protection. The cost of title insurance is a small investment compared to the potential losses from an undiscovered title defect.

Communicate proactively with all parties. Keep your real estate agent, lender, and title company in close communication. If your lender needs something from the title company, facilitate that communication. If the title company needs the seller to sign documents, ensure your agent follows up with the listing agent. Many delays result from poor communication rather than actual problem complexity.

Be prepared to be flexible. Sometimes despite everyone's best efforts, resolving a complex title issue takes longer than expected. A missing heir is hard to locate, a lender is slow issuing a release, or a court proceeding has mandatory waiting periods. If you've fallen in love with the property and the issue is being actively worked on, consider agreeing to extend the closing date rather than walking away from a deal that can be saved with a bit more time.