Mix-up over name can delay closing of real estate deal

January 03, 1993|By James M. Woodard | James M. Woodard,Copley News Service

It's amazing how a simple name mix-up in a real estate transaction can cause major problems for buyers and sellers.

"One of the most common problems resulting from a name mix-up is a delay in processing the closing of the transaction," said Daphney Hetherington, manager of Interstate Escrow Co. "And timing can be very critical in today's market when buyers want to benefit from a particularly low-mortgage interest rate."

More serious problems surface when people become involved in court actions that lead to judgments against them. These judgments, in turn, become liens against any real estate they own or may acquire in the future. When one of these people is mistakenly identified as a principal in a real estate transaction, it can set off a chain of frustrating delays and legal problems.

If there's a judgment against the seller of real estate, the property usually will not change hands until the judgment is eliminated or the matter is resolved to the satisfaction of all parties involved in the transaction.

Thousands of legal judgments are made in federal, state and local courts every day. It's important to determine whether the judgment against a person with your name is really you or someone else.

That's the purpose of the "Statement of Information" form that must be provided by property sellers and buyers during the closing of many transactions. Filling out all the lines relating to personal identification, residences and occupations during the past 10 years, former marriages and other requested information can seem like a needless hassle, but it serves an important purpose.

Even though a name is spelled differently, if it sounds the same it may be considered the same person under law, Larri Jones, a regional vice president of Chicago Title Co., said.

"In title searching, it's necessary to look at all possible variations of the name to protect the interests of principals in a real estate transaction," he said.

For example, the name Smith might be spelled Schmid, Schmidt, Schmitt, Schmied, Schmiedt, Smid, Smythe, etc. The name Nicols can be spelled 73 ways, from Nachols to Nychals.

It's also important to check first names. For example, there are 25 foreign forms of the name John -- including Johann, Mohan, Hans, Schaun, Guidi and Efom.

Forged or phony names are cropping up more frequently than at any time in history. Fortunately, most real estate transactions today are covered by title insurance, which insures the existence or nonexistence of rights to real property.

Title insurance also protects the policyholder against events that may not be obvious from checking public records, such as forgery or real estate fraud. If the title search misses a judgment against the seller because of confusion regarding his or her identity, that, too, is covered.

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