Tennessee Home Closings: Fix Title Risks Before You Buy

Why Title Matters in Tennessee

Your title is the legal right to own and use the property. Tennessee is a race-notice recording state, so interests not properly recorded in the register of deeds generally aren’t effective against later bona fide purchasers who record first. See Tenn. Code Ann. § 66-26-101.

Unreleased deeds of trust, unpaid property taxes, judgment liens, and mechanic’s liens can cloud title and jeopardize financing, title insurance, and future resale. See, e.g., Tenn. Code Ann. § 66-25-101 (release of mortgages/deeds of trust), § 67-5-2101 (property tax lien), § 25-5-101 (judgment lien on land), and § 66-11-112 (mechanic’s lien notice and recording).

Common Title Risks We See

• Unreleased liens and deeds of trust
• Delinquent or contested property taxes
• HOA/COA assessments and covenant violations
• Boundary or encroachment issues revealed by survey
• Breaks in the chain of title or erroneous legal descriptions
• Probate and heirship issues for inherited property
• Mechanic’s liens from recent work
• Judgment liens against current or prior owners
• Easements and use restrictions that limit planned improvements

Early Warning Signs During Your Contract Period

• Contract addenda referencing unresolved permits, improvements, or past disputes
• Seller disclosures noting past insurance claims, encroachments, or boundary issues
• Title commitment exceptions that are not marked for deletion after you provide supporting releases
• Survey showing fences, driveways, sheds, or utilities crossing boundary lines
• Property tax records showing delinquencies or owner names that don’t match the deed

How to Use the Title Commitment

Your title commitment identifies what must be cured or insured before closing. Review:

• Schedule A – parties, estate, legal description, and proposed insured amounts.
• Schedule B-I (Requirements) – items the title company needs to close (e.g., lien payoffs, affidavits, releases).
• Schedule B-II (Exceptions) – matters the policy will not cover (easements, restrictions, liens).

Ask your closer which items can be cured and which can be insured via endorsements. For general form and structure, see the ALTA Commitment for Title Insurance (07-01-2021).

Practical Fixes Before Closing

• Order lien payoffs and confirm the recording of releases in the county register of deeds. See Tenn. Code Ann. § 66-25-101.
• Resolve tax issues by obtaining payoff receipts and verifying with the county trustee; property taxes create a statutory lien. See § 67-5-2101.
• Request HOA/COA status letters and clear fines or violations.
• Commission a boundary or ALTA survey to verify lines and improvements; request appropriate title endorsements if available.
• Record corrective deeds or affidavits to fix legal descriptions or address chain-of-title gaps. See § 66-24-101 (recordable instruments).
• Address estates: use probate orders/letters; when acceptable to the title underwriter, affidavits of heirship or other curative instruments may be used. Court action may be required in some cases.
• Secure subordinations or partial releases for blanket liens.
• When immediate cures aren’t feasible, negotiate escrows, indemnities, or price adjustments.

Working With Your Closing Team

Coordinate among your real estate agent, lender, title company, and attorney. Provide prior surveys, permits, contractor invoices, and HOA contacts promptly. Ask for a written list of outstanding requirements and clarify who is responsible for each task. Confirm the plan for recording documents and when funds will be disbursed after requirements are met.

Post-Closing Protections

Keep your recorded deed, lien releases, owner’s title policy, and closing statement. Verify that releases are recorded in the register of deeds and that county tax records reflect the change of ownership. In Tennessee, recording is what gives notice to third parties. See § 66-26-101.

When to Involve a Tennessee Real Estate Attorney

Consider counsel if you encounter probate/heirship issues, complex easements, construction liens, substantial encroachments, or access disputes. An attorney can negotiate curative documents, coordinate court filings, and structure escrows or contract amendments to keep your closing on track.

Buyer Checklist

• Read the title commitment (all schedules) and ask questions about each exception.
• Order a current survey if there are boundary concerns or improvements near lot lines.
• Verify tax status with the county trustee and assessor.
• Obtain HOA/COA status letters and governing documents.
• Confirm payoff amounts and release procedures for all liens.
• Align closing dates with the time needed to record cures, not just to receive them.
• Request endorsements tailored to your property and intended use.

FAQ

Do I need an owner’s title insurance policy in Tennessee?

While not legally required, an owner’s policy protects your equity against covered title defects discovered after closing. Most buyers choose to purchase it at closing.

What if a lien release is not recorded by closing?

You can delay closing, escrow funds with clear release terms, or obtain title insurance coverage if the underwriter will insure around it. Recording the release as soon as possible is critical.

Can endorsements fix every exception?

No. Some exceptions require a cure, such as unpaid taxes or recorded liens. Endorsements may provide additional coverage for certain risks, but they cannot insure over known, uncured statutory liens.

Who records curative documents in Tennessee?

Typically the title company or closing attorney submits documents to the county register of deeds. Always confirm responsibility and timing before closing.

Sources

• Tenn. Code Ann. § 66-26-101 (effect of recording)
• Tenn. Code Ann. § 66-25-101 (entry and release of mortgages/deeds of trust)
• Tenn. Code Ann. § 67-5-2101 (property tax lien)
• Tenn. Code Ann. § 25-5-101 (judgment lien on land)
• Tenn. Code Ann. § 66-11-112 (mechanic’s lien notice and recording)
• Tenn. Code Ann. § 66-24-101 (recordable instruments)
• ALTA Commitment for Title Insurance (07-01-2021) (commitment structure and schedules)

Tennessee-specific notice: This article provides general information about Tennessee real estate closings and recording practices. It is not legal advice and does not create an attorney-client relationship. For advice about your situation, please contact a Tennessee-licensed attorney.