The words “title” and “deed” may sound familiar if you have ever bought a house. Many people are not aware that they are two separate things.
The “title” to property refers to the legal privileges an owner can exert over their land. Title rights give the owner access to the property, allow them to sell or transfer it to other parties, and enable them to enjoy and use it in any way they see fit.
The “deed” is the basic written legal document that assigns the title rights. In other words, when a party wants to deal or assign the title to their property, they have to form a deed to do so. Once a buyer gets the deed, they should immediately file it with the county clerk’s office where the land or real estate is located.
What Is a Title Search?
A title search, or a property title search, is a procedure that involves checking files from the county records department to see a particular property title’s ownership record. A commercial agent usually performs the investigation, such as a title company, a real estate attorney, or an escrow officer.
A title search aims to confirm that the seller is the actual legal owner of the property being sold. It also helps to confirm that the title is not clouded by a defect that could decrease the value of the land or would subject the buyer to some legal liability.
Some instances of things that can cloud a title (e.g., cause a title defect) include:
- If the property has a mortgage lien or unreleased lien attached to it;
- Where there are pending probate matters regarding the property;
- When a home is part of a foreclosure action;
- If the title to the property is fraudulent or forged;
- When there are defects or errors in the chain of title
Various other documents could make the property title questionable.
In addition, if a buyer has title insurance, then the agent searching will need to determine whether the title insurance company will insure the title as part of the search process.
How Do Title Searches Work?
A title company or an attorney usually performs a title search. They are typically performed on behalf of a prospective buyer interested in making an offer on the property.
The process may also be started by a lender or other entity that wants to verify the property owner to determine what claims or judgments against the property may exist.
When conducting a title search, the lawyer or title company will conduct research using public records and legal documents to determine the vested owner, the liens or other judgments on the property, the loans on the property, and the property taxes due.
While a forthcoming buyer or another person can perform a title search independently, it is not generally recommended. Legal documents can be confusing, and gaining access to courthouse records can be difficult.
What Other Kinds of Records Does a Title Search Review?
Each title search company or an individual attorney hired to perform a title search may review different kinds of documents. In general, they will generally examine the following:
- All public and court records associated with the property;
- The chain of title;
- Property tax records;
- Any legal descriptions included of the property;
- Liens or other claims made against the property; and
- Whether there are any easements recorded.
The purpose of this is to prevent other individuals (e.g., creditors or true landowners) from intervening with purchasing the property. It also serves to shield the buyer from potential lawsuits.
Are There Title Issues that a Title Search May Not Disclose?
There is a chance that the title search may not disclose all of the problems connected to a certain property.
Some of the most typical examples of issues that a title search may not readily reveal:
- Fraud cases;
- Forgeries;
- Mental incompetence;
- Clerical mistakes;
- Improperly probated wills; and
- Puzzlement due to similar or identical names that arise in the chain of title.
To limit the chance of such a misstep, title insurance is available to protect a party from any damages incurred due to these errors. For instance, if a buyer purchases a property and later discovers an issue with the title, the title insurance company will have to pay out any damages to the titleholder or try to correct the problem.
Are There Any Special Considerations?
An attorney or a title company will scour public records on a property’s ownership before you close a deal on purchasing a home as a prospective homebuyer. Once the investigation is completed, you will obtain a preliminary title report. If there are any problems or concerns with the title, you can point them out to the seller. Depending on the precise nature of the problem, you can then choose whether you want to go through with buying the property.
You will likely want to include your lawyer and real estate agent in these talks. Some problems uncovered via a title search are quickly cleared up, while others may take so long that they endanger your loan responsibility.
What Is Dirty Title vs. Clean Title?
A title search establishes a property’s legal ownership and identifies any claims on the property. Inaccurate surveys and unresolved building code infractions are title search conclusions that could result in a “dirty” title. While a “clean” title confirms sole ownership of a piece of property or land, a “dirty” title suggests that there is a cloud of uncertainty or discredit dangling over the property or land.
What Is Title Insurance?
Even a business or professional experienced in operating title searches can sometimes miss something, or there can be a paperwork mistake that leads to a document being missed. Errors can happen. These missteps can be expensive if you later uncover an issue with the property once you have finalized the purchase. For this reason, buyers will often buy title insurance which can cover you and your mortgage lender from financial loss if a problem with the title emerges during or after the sale.
Unlike conventional insurance, title insurance protects both real estate owners and lenders against loss or damage occurring from liens, encumbrances, or defects in a property’s title or actual ownership; unlike conventional insurance, which covers against future occurrences, title insurance shields against claims for past events.
A basic owner’s basic title insurance policy typically covers the following perils:
- Ownership by another party
- False signatures on documents, as well as forgery and fraud involving title documents
- Defective recordation (insufficient records or record-keeping)
- Restrictive covenants (terms that lessen value or enjoyment), such as unrecorded easements
- Encumbrances or judgments against property, such as outstanding lawsuits or liens
Do I Need to Hire a Lawyer for Help with My Title Search or Title Search Problem?
Purchasing real estate is often a significant investment that can cost a person money. Thus, the deed to the acquired property is an important document because it affects the buyer’s ownership interests and their rights over a specific parcel of property.
Suppose you are looking to buy a home or other real estate. In that case, you should consider contacting a local real estate attorney. An attorney will conduct a proper title search of the property you are interested in buying, which can help minimize the risk involved with making your purchase.
Also, experience any issues with the title after acquiring the property. A qualified real estate attorney can help you defend against any attacks on the title to your property or hold the seller accountable for any damages you may be facing due to a mistake on their part.
