Title Services

Title Services

A title search is an examination of public records to determine and confirm a property's legal ownership, and find out what claims or liens are on the property. A clean title is required for any real estate transaction to be completed.

How Title Searches Work

A title search is usually performed by a title company or an attorney, and they are usually performed on behalf of a prospective buyer who may be interested in making an offer on the property.
The process may also be initiated by a lender or other entity that wants to verify ownership of the property in order to determine what claims or judgments against the property may exist. This process would be conducted before approving a loan or other credit that uses that property as collateral.

When performing a title search
The attorney or title company will conduct research using public records and legal documents to identify the vested owner, the liens or other judgments on the property, the loans on the property, and the property taxes due.

While it is possible for a prospective buyer or another individual to conduct a title search on their own, it is not generally recommended. Legal documents can be confusing, and gaining access to courthouse records can be a difficult process.

Special Considerations

An attorney or a title company will search public records on a property's ownership before you close a deal on the purchase of a home as a prospective homebuyer. Once the search is finished, you will receive a preliminary title report. If there are any issues or problems with the title, you can point them out to the seller. Depending on the exact nature of the issue, you can then decide whether you want to go through with the purchase of the property.
You will likely want to include your attorney and real estate agent in these discussions. Some problems discovered via a title search are easily cleared up, while others may take so long that they jeopardize your loan commitment.

Dirty Title vs. Clean Title

A title search confirms a property's legal ownership, and identifies whether there are any claims are on the property. Erroneous surveys and unresolved building code violations are examples of title search findings that could result in a "dirty" title designation. While a "clean" title proves sole ownership of a piece of property or land, a "dirty" title indicates that there is a cloud of uncertainty or discredit hanging over the property or land.

Title Insurance

Even a company or professional experienced in conducting title searches can occasionally miss something, or there can be a paperwork error that leads to a document being overlooked. Mistakes can happen, and these mistakes can be costly if you later discover there’s an issue with the property once you have already completed the purchase. For this reason, buyers will often purchase title insurance which can protect you and your mortgage lender from financial loss if a problem with the title arises during or after the sale.

Title insurance protects both real estate owners and lenders against loss or damage occurring from liens, encumbrances, or defects in the title or actual ownership of a property. Unlike traditional insurance, which protects against future events, title insurance protects against claims for past occurrences.

A basic owner's basic title insurance policy typically covers the following hazards:
Ownership by another party
Incorrect signatures on documents, as well as forgery and fraud concerning title documents
Defective recordation (flawed records or record-keeping)
Restrictive covenants (terms that reduce value or enjoyment), such as unrecorded easements
Encumbrances or judgments against property, such as outstanding lawsuits or liens

A search report traces the history of a property - who was the original owner of the property and how it has moved hands over a period of time before reaching the present seller. This is an important part of a housing loan process. A search report is usually prepared by an advocate, who after visiting the registrar's office and inspecting the property documents, issues a title certificate.
A title certificate states whether the property is unencumbered and has a clear marketable title. This search report and title certificate can be obtained from one's own advocate or if the search has already been conducted by the current owner, one can have his advocate inspect the report to ascertain the title of the property.

One may do a survey of the title of the property himself also by visiting the office of the registrar. The report traces any charges or encumbrances created on the property and their present status -whether the charges have been met and the property has been released, or if there are some charges pending still. This search on the title of a property is taken for a period of the past 30 years.
It is mandatory for a developer to annex a copy of the report in the 'agreement to sell' with the intended purchaser. This document will state if there is any existing mortgage, litigation, condition or claim, which is likely to affect the title of the buyer adversely. In the same way, a bank is also assured of the tile of the property. Banks usually do not finance an encumbered property or one under legal dispute because it reduces its security and increases its risk exposure. In order to avail a housing loan, one of the preconditions is that the title of the property should be clear and marketable.

A clear and marketable title means the seller should be genuine and the actual owner of the property. Further, the property should not be under any dispute or litigation. A search report traces this history of a property. In many cases, the lending bank has its own advocate who specialises in this exercise. Usually, the cost is nominal and is built-up in the processing and administration charges of the bank for sanctioning and disbursing of the loan. Others charge a nominal fee for this exercise.

The report acts as a security for the purchase of a property. The report gives comfort to the purchaser that the title of the property he is planning to purchase is good and he will not face any problems at a later stage due to some pre-existing charges or encumbrance, or legal dispute on the property. A search report gives a buyer the confidence that he is undertaking a transaction with a genuine party.