Do I Need A Title Search?
A large part of my business (especially before the housing market crashed) deals with real estate transactions such as property closings. From time to time, I get the question “Do I really need a title search?” This question, unlike many legal questions, is easily answered – yes . . . every time.
A title search is the process through which someone purchasing land or a house ensures that the property they are buying has a “clear title.” Basically, property with a clear title means that buyers don’t have to worry about being involved in a lawsuit regarding the property after they have purchased it. Several areas regarding the property are checked when a title search is performed. The person reviewing the title, or the title “abstractor” not only checks to make sure the seller has sole ownership of the property, but also checks to see if liens are filed against the seller or the property, if the property has valid, legal access to a public road, if the property taxes have been paid, etc.
Whenever a property buyer tells me they don’t want a title search, the buyer usually believes he knows enough about the property to trust that the seller is the sole owner. In other words, the buyer knows the seller, and knows that the seller or his family have owned the property for several years. However, the only true way to know that the buyer owns the property, and no-one else shares a legal interest in it is to have a title search performed on the property. In fact, when someone tells me a piece of property has been in the same family for years, I especially urge them to get a title search. Property that has been “in the family” is usually passed down from generation to generation through the previous owner’s death. This is a recipe for title trouble, especially if the previous owner did not have a will, or the will was not probated properly. When I question a seller in these types of situations and am told that “everybody knew Daddy wanted the house to go to Sissy,” a chill runs up my spine.
Additionally, sometimes owners have liens filed against them that they don’t know are there. State and/or federal tax liens, unpaid property tax liens, old judgments, misfiled judgments – all can be attached to the property without a seller’s or buyer’s knowledge. If a seller transfers the property with these types of liens filed, they travel with the property even if the seller had no idea they existed. What’s worse, if the lienholder later decides to execute on the property, it could be sold to satisfy the lien. So, it is always a good practice to get a title search on any property you intend to buy.
This column is intended for general information purposes only. It is not intended, nor should it be construed as personal legal advice. The answers to most legal problems rely on the specific facts of your situation; therefore, it is very important that you personally see a lawyer when these situations arise.