What is a Title Search? It is a preliminary report, usually ordered by the lending institution that is financing a home purchase request. It is an examination of the history of the property in question to make sure that there aren’t any issues that could prevent the buyer from becoming the new owner of the property. It is conducted on the names and addresses of the current property owners to uncover any documents of public record that might affect the lenders’ or buyers’ rights to the title of the property. It is designed to uncover any liens or claims on the property.
A title search company or real estate lawyer would perform the title search on behalf of the prospective buyer. Here are six potential issues that could be unearthed in a Title Search.
Liens
This could be an unpaid utilities bills or mortgage payment. Outstanding property taxes or renovation bills, or condo maintenance fees would be considered liens against the property. It’s a registered claim against the property itself, that was charged to the previous owner that you would be responsible for paying.
Errors in the documentation
Simple filing errors such as an erroneous description of the property can potentially affect your rights as a homeowner. The wrong square footage being documented could affect the tax assessment of your property.
Non-compliance
As the new owner, you would be responsible for rectifying anything on your property that violated municipal regulations or building codes.
Boundary disputes
The property could have encroachment issues. A fence, shed or deck that sits on the neighbour's property would be something that you as the new owner would now be responsible for rectifying.
Forgery or fraud
A third party, unbeknownst to the current owner, could take out a second mortgage using forged documents or stolen identities. As the new owner of the property, this would become your responsibility.
Surprise heirs
Although rare it does happen. An unknown heir could come back years later to assume their rights as the owner.
If there are any issues with the title of the property they need to be cleared before the sale of the home. Most issues are easily resolved by the title search company although some may need the expertise of a real estate lawyer.
This information should not be relied on as legal advice, financial advice, or a definitive statement of the law in any jurisdiction. For such advice, please consult your own legal counsel or financial representative.
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