Best title search practices you wish you knew sooner
What is title search?
Are you planning on buying a new property? Wow, that sounds great! So you must be assuming that the seller is entitled to sell the home? Well, that assumption can lead to harrowing consequences if someone shows up on the doorstep with a claim or lien on the property.
To avoid these heartbreaking consequences you need a property Title Search.
Although property title search is comprehensive and title deeds are public records that can be accessed by anyone, professional title searchers at Invisia are skilled at locating and organizing specific details required for different types of real estate transactions.
A property title search is a process where we examine public records regarding the property to make sure that the current owner has the legal right to transfer ownership. In brief, we can say that title search reveals any issues in the chain of title, mortgage, liens, and other tax issues, trouble with the legal interpretation of the property, judgments against the owner, and other issues that could hold back the buyer from taking ownership or using the property.
Anyone who is trying to own real estate, whether as a purchase or as a present, is always advised to carry out a title search for the property before purchasing. It is a great search tool for collecting background information about a current or possible site. To protect against any kind of financial loss that may occur if a title is found to have issues, one should aim for Title insurance.
Now that we have seen what is title search is about there are some points that you need to follow to have a perfect title search and save your property from any kind of fraud that can stop you from securing the property. These things will be discussed further in the article.
Here is a walkthrough of what this article is about
Things you should keep in mind before performing a title search:
- Righteous Ownership
- Nature of property and land use
- Say no to pending litigation and Taxes
- Pending developments and constructions
- Conditional ownership
- Chain of Title
- Encumbrances the unknown debts
Things you need to avoid while performing a title search:
- Standard search periods
- Impersonations
- Unknown Will
- Easement issues
- Survey disputes
- Inexperienced title examiners
Things to remember while doing a title search
1. Righteous Ownership
Everything that looks fair and simple is not that way. So it is necessary to verify the documents evidencing the ownership. To ensure that the transferor is the real owner of the property and has marketable rights concerning the property, it is essential to possess property-related documents and verify if they correspond with public records which are held by the local authorities. It should also be checked and verified whether these documents are stamped and registered accurately.
2. Nature of property and land use
During title verification, it is considered mandatory to verify the nature of the property, whether it is government-owned or individually-owned. Any property which is under acquisition of government cannot be further transferred or alienated without the prior consent of competent authority otherwise such transfer will be void ab initio.
While managing title verification it is requisite to determine the land use or status of said property whether it is agricultural land or non-agricultural land. This is because knowing the land use pattern will help the buyer determine the benefit of the property.
3. Say no to pending litigation and taxes
It is also important to ascertain that no pending litigation and property tax is having the said property as subject matter. The pending litigations can be determined by searching civil courts under whose jurisdiction the said property lies. It is also suggested to gather property tax slips from the previous owner.
This will give you an insight into whether the property is duly registered and no dues are pending with the municipal authority. A representation can be made in the transaction document stating that there are no encumbrances and pending disputes and then imposing liability on the seller in case there are any. This can help to minimize the risk further.
4. Development and constructions
This is the property that no one tends to notice. If the property has some developments or construction, it adds up a few steps to title verification which means it adds up more time to your transaction to be processed. It must be checked that the structure is in adherence to the building plan and sanction plan in the same manner as prescribed and passed by the municipal authorities.
5. Conditional ownership
Conditional ownership is an arrangement that is made in interest in a property that is being fulfilled before the participant willing to buy the property can obtain absolute ownership. What this contains is a few conditions that may be something that is required of the person receiving the property interest or it can also be unrelated like a year. If you were to buy a property under conditional ownership, You would be awarded a conditional title certificate, which would help you enjoy your ownership benefits such as resale or transfer of title, ensuring a loan, etc.
6. Chain of title
It’s always better to avoid Confusion over property rights because it can create tension between individuals. Usually, a property might be transacted and changed hands multiple times before so this might lead to confusion. It is sequential and shows all the owners of a piece of property. Chain title is sequential, going from the very first owner before to the current owner. Therefore, Title verification not only involves reviewing and verifying the title of the existing owner but past owners also.
A chain of title means the paperwork about the historical record of the title of the property that starts from the present owner and ends at the original owner of the property. Failure to transfer title could lead to difficulties establishing legal ownership and/or issues with selling the property in the future.
7. Encumbrances
Sometimes property can be used as a pledge to take loans. This creates an encumbrance charge by a party who is not the proprietor against a property which means the property is subject to lien or mortgage and cannot be transacted further without the prior approval of the lender. Property’s transferability will be affected by an encumbrance and its free use is restricted until the burden is lifted. Some common forms of encumbrance apply to real estate include easements, mortgages, and property tax liens.
Before buying a property, it is well-advised to examine to obtain a no-encumbrance certificate from the Sub-Registrar or Tehsildar or other relevant officials.
Things to avoid while doing a title search
1. Standard search periods
Be sure to review that the title search is shipped according to your state’s requirements. Different states generally have different year requirements for platted land up to the last warranty certificate. So if you are planning on conducting searches in other states, be sure to reference your underwriter’s guidelines to ensure your adhering to each region’s regulations.
2. Impersonations
False imprisonment transpires when a person (who does not have the legal right or justification) deliberately restricts another person from exercising his freedom. This can be possible when a person uses common or similar names to impersonate a property’s title. There exists a risk of losing your legal right to the property if you secured it from a false owner, there is a risk of. So in case someone intentionally restricts another person’s freedom, you can hold him liable for custody in civil and criminal courts.
3. Unknown Will
When a property owner passes away with no evidence of will or heir, the state may assume his or her assets responsibility. When you purchase such a home, you appropriate your rights as owner. But the buyer can claim ownership of the property when the State sells the property to them. However, even years later, the late owner may show up with his will and you may have to face challenges with your rights to the property.
4. Easement issues
It may have ease in it but it is not as easy as it sounds! The term often crops up after you have made an offer on a property and that’s been accepted. An unknown easement may prohibit you from using the property that you have purchased as you want to. You may have to allow government agencies, businesses, or other parties to access all or portions of your property if you didn’t check an easement before buying it. So it is always advised to avoid overlooking an easement because a title search dredges up the easement which is essentially the legal right to use the property.
5. Survey disputes
You may have looked into several surveys of your property before purchasing it, however, there may be differing boundaries for other surveys that you didn’t know existed. This can happen when the seller may show you false surveys of the property that depict boundaries that are not a part of the property. This can eventually lead to unexpected conflicts when a third party might point these discrepancies out, claiming ownership over a portion of the property.
6. Inexperienced title examiners
Title Examiners, sometimes called title searchers, play a key role in the process of scouring property records. They perform a crucial survey on title reports and property abstracts to determine the risks associated with insuring a specific property.
It takes a good deal of clerical work to have a solid understanding of local, state, and federal laws relating to the property. So this is the reason choosing an experienced title examiner plays a vital role. Many of the issues that they spot could be missed by the untrained eye.
Conclusion
Buying a property itself is a huge investment, so imagine if you are buying a property with a faulty title. That means you will be losing the value that the property possesses. And when only a clear title can set a seal on the fact that you have an explicit right to own the property and sell it further title search becomes a key piece in this process.
Why? Because this step will help you scrutinize whether or not you will have a clear marketable title, which determines that ownership rights are free from any uncertainties, risks, and in case of any kind of claims, encumbrances, and defects it will help you identify them and mitigate them in earlier stages.
So it can be avowed that having the perfect set of documents related to the title and conducting a title search for the same is the only way you can feel comfortable with your purchase and for having more knowledge to move forward with the purchase that is in your best interest.