Buying a property is an important financial investment, whether you’re looking for rental units, family homes, or even commercial spaces. To make sure your investment is worth the shot, you need to confirm it for legitimate ownership. You can easily do so by checking the property title search, which officially records property ownership, claims, or restrictions. Let’s know all the significant information it can offer here.
Property Ownership Details
The primary information a property title search can offer is confirmation of the legal property ownership. This helps you identify the current registered owner, the legal right and authority of the seller you’re dealing with to sell the property at all, and whether the property is owned by one individual, a group of people, or a company. It protects you from fraudulent property transactions.
For instance, if someone tries to sell a property but they are not the legal owner or do not have the authority to sell the property, the title search shows you the records. When you notice any discrepancy, you can cease any transaction with the said individual and protect yourself from getting scammed. You can even report the individual to the authorities and seek legal help against them.
In addition, you can study property ownership details to understand the structure of ownership: individual ownership (requires authorization only from the sole owner), joint ownership (requires authorization from all owners), tenancy in common (requires authorization from everyone and the lack of one’s consent causes complication), or ownership by a trust or corporation (requires authorization from trustees, directors, or legal representatives).
Chain of Ownership (Property History)
A property title search also shows you the historical chain of ownership of the property, which is called the chain of title. It lets you know about all the previous individuals who owned the property in the past. You also get to learn how ownership was passed from one party to the next, including inheritance transfers, property sales, gifts, settlements, or court-ordered transfers.
By reviewing the chain of title, you can confirm that each transfer was legally recorded and executed. If you notice anything off with the chain of ownership, like an irregularity or break, the validity of the current title is at stake. In this case, you can question its validity and drop the idea of acquiring the property.
If everything adds up, you have more confidence in the property and can acquire it without worries.
Existing Mortgages and Liens
The next information a property title search gives you is the pending financial claims on the property, such as mortgage loans, home equity loans, tax liens, and contractor or mechanic’s liens.
If there is a lien, the creditor or lender gets a legal claim on the property until the existing debt is cleared. If you buy a property with existing liens, you inherit the debts, and their claim on the property still exists.
Through a title search, you can check for the issue and get the owner to resolve it before acquiring the property. This protects you from unexpected financial burdens.
Property Taxes and Outstanding Dues
Title search also lets you know about unpaid property taxes and government dues. If the property has unpaid taxes, the consequences can be serious. This leads to tax liens on the property, potential tax foreclosure, and government claims against the property.
When property taxes are not paid for too long, local authorities can even auction the property. This lets them recover the outstanding tax amount. Thus, a title search helps you understand whether the existing owner has settled all taxes and dues.
Easements and Rights of Way
Title searches also reveal easements. These are legal rights that let others use a part of a property for defined purposes. This can be anything like shared driveways and pathways among multiple apartment owners, drainage systems, water access routes, utility company access for power lines and pipelines.
Easements don’t affect a property sale, but they show how you use specific areas of the property and if there are any limitations.
For instance, if the utility easement runs across the backyard, you’re restricted from building anything there.
Legal Restrictions and Covenants
Title searches also tell us about the existence of any restrictive covenants or legal restrictions attached to the property.
Such restrictions are usually set by homeowner associations, last property agreements, or developers. These rules can be about commercial and residential building usage, maximum building height, architectural guidelines, and restrictions on noise and other activities.
For instance, specific neighbourhoods bar some business operations in residential zones. Some even have strict standards for design to ensure consistency in appearance.
Closing Thoughts
A property title search can prevent you from inheriting financial burdens, legal issues, and other property disputes. So, always invest in a property title search before finalising a property purchase.
