If you are involved in a commercial real estate transaction, it’s always a good idea to consult with a title insurance company or an attorney to obtain the correct legal description for the property. Using information obtained from a prior document, a tax legal description, or other source may result in an incorrect legal description and result in a number of problems.
Incorrect Legal Descriptions
As title insurance professionals, we have seen a number of problems that have resulted from the use of an incorrect legal description. Some of those problems include leaving part of the property behind or including too much property in a conveyance. Depending on the circumstances, these avoidable problems can result in expensive clean-up work in the future, sometime involving litigation.
Clouding Another Person’s Title
An inexact legal description could result in clouding title to your neighbor’s property. “Clouding title” means making title or ownership to your neighbor’s property doubtful and can result in litigation.
For example, let’s say that the legal description to your home is Lot 1, Block 1, Minneapolis Addition. You draft a document with the legal description of Lot 1, Minneapolis Addition – leaving out “Block 1.” If you record that document, you have now clouded title to every Lot 1 in Minneapolis Addition. So in addition to your document showing up in the county records as affecting your Lot 1, Block 1, Minneapolis Addition, that document also shows up as affecting Lot 1, Bock 2, Minneapolis Addition; Lot 1, Block 3, Minneapolis Addition, and so on. Attorneys or title companies looking at title to your neighbors’ properties will find this document recorded against their title. Depending on the document’s significance, it could impair your neighbors’ ability to sell their property or take out a mortgage. You can imagine the frustration and potential legal problems that may result.