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5 Crucial Steps Completing the Title Search Process
In real estate law, a title search (also called property title search) is a process followed to retrieve documents. It can help determine relevant interests in the property and concerning regulations. A title search is typically performed to find answers to these questions about a property up for sale.
Does the property owner have a saleable interest in the property?
What type of allowances and restrictions are there about the land usage?
Are there any liens on the property?
In general, a full coverage search and a limited coverage search are the two main types of title searching. Other types include foreclosure guarantee searches and non-insured reports. In many cases, people choose to get help from a title search firm or an expert attorney to complete a title search.
The process of performing a title search involves online legal research and assessing official land records. Each record is a document that can be used as evidence concerning an event that occurred in the past. The end goal of the title search is to form a clear, marketable title by detecting any outstanding claims.
Essential Steps of the Title Search Process
Finding Previous Titles
It is the sequence of the title’s historical transfers. The chain here consists of information on the property’s current owner, previous ones, and the first owner. This information is usually obtained from public records available in local government offices, for instance, a County Clerk’s office.
In case this chain is incomplete, there must be a cloud on the tile. Here, this cloud indicates that the current owner doesn’t have a marketable title. There are several reasons this chain can be incomplete. For example, due to a deed forgery, the previous owner might have used a different name to acquire the title.
In such situations, there comes a need for a lawsuit. Under this, potential claimants are brought to court and required to prove that they are the genuine owners. If they cannot provide proof of the title, they’ll be not allowed to claim any interest in the land.
The next step involves revealing the latest status of taxes against the property. This step is vital because here, one can determine If the real estate taxes on the property are paid off completely or not. And if not, how many taxes are due and unpaid, and from how many previous years?
Nobody wants to buy a property with due taxes because such a situation leads to the creation of a lien against the property. If anyone purchases one such property, the government gets the right to put the property on the market for sale to cover those taxes.
Know this, too: as a lender, if you get your property insured, you can protect it against loss from overdue taxes.
It is a very crucial step in the title search process. An inspection officer or inspector prepares a report revealing any encroachments or other similar matters that may have a potential impact on the title. Besides, they check the property through a physical visit for the verification of land size and improvement areas and to find any evidence of easements not officially recorded.
They will also check if anyone is using that property or if it is vacant. When the inspector notices an unrecorded easement or any other factual information affecting the title, they will record it and send it to the interested buyer.
The core purpose of this step is to collect more facts and pieces of evidence that can increase the authenticity of the information obtained from the title search as a whole.
Name and Judgment Search
Judgment search (as the term itself says) refers to the process of finding judgments pending to be fulfilled by the owner of the property. In real estate law, judgment is a general lien against the property. It consists of security for any money owed under the judgment, and the government can sell it so as to satisfy it.
The government gets these rights due to liens, unpaid property taxes, and judicial decrees. Under the law, the government’s rights will be considered over the buyer’s or lender’s rights to the property.
If the professional performing the title search discovers such judgments indicating the property with a defective title, the owner should eliminate this defect before transferring the title to a buyer. This will involve some legal procedures and payments to get the title cleared off all judgments and claims.
In most instances, the title search process constitutes a clear sale agreement, and a property has a lien or judgment. Once everything is clear about the title and the defects (discovered by the search) are rectified, both parties can proceed further with closing the deal, and the title is transferred.
Following these steps, one can ensure that the title has no defects and is clear of claims. This makes it smoother for the deal to be closed between both parties. The title search is a crucial aspect of mortgage processing, too, due to the involvement of high-value time and money.
For this, real estate companies, banks, and financers usually depend upon legal professionals. This is because they want to ensure that the information acquired is accurate and clearly described.
Not only financers and realtors but also law firms take external support with relevant functions such as legal document review. Having an additional source of support that can be used on-demand can help reduce the overall workload of the law firm. This enables the in-house staff to focus on core operations.
At Cogneesol, we are a dedicated team of legal professionals offering high-quality legal process outsourcing services to legal firms since 2008. Our qualified, skilled, and experienced legal experts provide round-the-clock legal back-office support within a predefined TAT.
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