Best Title Search Practices You Wish You Knew Sooner
Are You Planning on Buying a New Property? Wow, that sounds great! You might assume the seller is entitled to sell the home. However, that assumption can lead to serious consequences if someone later claims ownership or holds a lien on the property. To avoid such risks, you need a property title search.
What Is a Title Search?
A property title search involves examining public records to confirm that the current owner has the legal right to transfer ownership. It uncovers potential issues in the chain of title, mortgages, liens, unpaid taxes, legal disputes, or judgments that could prevent you from taking ownership or using the property freely.
Anyone planning to acquire real estate – whether through purchase or gift – should always conduct a title search first. This search provides valuable background information about the property. To safeguard against financial losses from title issues, securing title insurance is highly recommended.
Although title deeds are public records, conducting a proper title search requires expertise. Professional title searchers at Invisia BPO specialize in locating and organizing detailed property information for various real estate transactions. Their accuracy and attention to detail ensure a smooth and reliable process
Things to Remember While Doing a Title Search
Now that you understand what a title search involves, let’s explore the key steps to perform it effectively and protect your property from fraud or ownership disputes.
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
While verifying the title, determine whether the property is government-owned or privately owned. Properties under government acquisition cannot be transferred without prior approval from the competent authority. Ignoring this can render the transfer invalid.
Also, verify whether the land is agricultural or non-agricultural. Understanding land use helps you assess the property’s potential benefits and suitability for your intended purpose.
3. Say “No” to Pending Litigation and Taxes
Confirm that the property has no pending litigations or unpaid taxes. Search the local civil court’s database for cases involving the property. Additionally, collect property tax receipts from the previous owner to ensure all dues are cleared.
Doing so helps confirm that the property is properly registered and free of municipal arrears. Include a clause in the transaction agreement stating there are no encumbrances or disputes, and make the seller liable if any arise. This precaution minimizes potential risks.
4. Development and Constructions
Buyers often overlook the importance of verifying ongoing developments or constructions. Check whether the building complies with approved plans and municipal regulations. Unauthorized structures can lead to delays and legal complications during ownership transfer.
5. Conditional Ownership
Conditional ownership applies when certain requirements must be met before ownership becomes absolute. If you purchase such a property, you receive a conditional title certificate, which still allows you to enjoy ownership benefits like resale or loan security. However, verify and fulfill all conditions to gain full ownership rights.
6. Chain of Title
Confusion over property rights can cause disputes. A chain of title provides a chronological record of all past and current owners. Reviewing the complete ownership history ensures every transfer was valid and helps detect missing links or errors.
A well-maintained chain of title not only confirms legal ownership but also prevents future complications during resale. If ownership isn’t properly transferred, proving legal rights later can become difficult.
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 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 occurs when a person without legal authority or justification intentionally restricts another individual’s freedom. In real estate, this can happen when someone uses a common or similar name to impersonate a property’s rightful owner. Such impersonation poses a serious risk, as you could lose your legal right to the property if it was acquired from a fraudulent owner.
If someone deliberately restricts another person’s freedom or acts to deceive ownership, they can be held liable in both civil and criminal courts. Therefore, conducting a thorough title verification is essential to confirm ownership authenticity and protect against fraudulent claims or impersonation.
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 is a huge investment, but a faulty title can diminish its value. A title search ensures that ownership rights are clear, free from claims, encumbrances, or defects, helping you avoid future risks.
So, protect your investment with a thorough title search! Ensure your property has a clear, marketable title and avoid future risks. Partner with Invisia BPO today for expert title search services that give you peace of mind and secure ownership rights.
Contact us now to get started!