What Does a Title Search on Property Reveal?
People have contradictory feelings when it comes to title searches, when they’re buying property.
Many see them as an extra expense, a nuisance, or another barrier to just buying the property that they want. Until the title search reveals something that the buyer wouldn’t have otherwise known, in which case, the buyer breathes a sigh of relief that they avoided a potential disaster.
A title search is a search for any liens, encumbrances, on property, and it also ensures chain of title—that is, that the buyer actually owns the property, and thus, can legally sell it to you.
But a title search does more than that. There are a lot of major headaches that can be uncovered, using a title search.
Easements – Easements are the ability for people other than the owner, to utilize property. For example, FPL has an easement on most everybody’s land to come onto it, for the purpose of doing anything that FPL does.
Often, there may be easements allowing the public to use or cut through people’s land to get to parks or beaches, or neighboring properties may need access to use your land through an easement, in order to get to, and access, their own property.
Many easements are harmless and will cause you little headache—but it’s good to know about them, in the event that an easement materially affects your use and enjoyment, and the value of the property.
Prior open liens – When you buy property, you just assume that all prior liens, especially mortgages, have been paid off. But don’t make that assumption. Often, they are not paid off—or they were, but there’s nothing in the public records, proving that prior loans or mortgages or liens were paid off.
An open lien may just be an error—a failure to record that the lien was satisfied—but it could be proof that there is actually a valid open lien that can be foreclosed on, which is definitely not what you want for your newly purchased property.
Unpaid taxes – If a prior owner didn’t pay taxes—be it on the property, or any other kind of taxes—there could be a tax lien on the property. And while you won’t have to pay those taxes yourself, you could lose the property, should the taxing entity decide to foreclose on the property.
Restrictions and Covenants– Often, restrictions on how you can use your property are recorded in the public records and then run with the property. Imagine HOA rules, which apply to the property no matter who buys or sells it. There can be other covenants that relate to how you can use your land, that you wouldn’t know about in the absence of a title search.
Type-os – Clerical errors can be a big deal. Ten years ago, if Howard Johnson bought property, but Howie Johnson Jr. sold that same property, that may be the same person, and likely is—but that minor error could cause a cloud on title for you, as those are technically different names that apply to different people.
Do your real estate closing the right way. Call the West Palm Beach real estate lawyers at The Law Offices of Larry E. Bray today if you’re buying or selling property.
Sources
linkedin.com/pulse/top-9-issues-look-during-title-searches-jane-f-bolin
rocketmortgage.com/learn/title-search
