Here are reasons why reviewing the TITLE SEARCH is important...
Describes How the Property is Registered: Ideally you are looking for “Fee Simple.”
Fee simple ownership, also known as freehold ownership, is the most complete form of property ownership, where the owner has absolute and indefinite ownership.
“Leasehold land” refers to a situation where the owner of the land grants a leasehold interest in the property to a tenant or lessee for a specific period of time, which is usually several decades. The lessee pays rent for the use of the land and has exclusive use of the property during the lease term.
To Verify Ownership: The title search ensures that the seller has clear ownership of the property and can legally transfer it to the buyer. This is important because if there are any disputes over ownership, it can delay or even prevent the sale from going through.
To Reveal Potential Issues with Financial Charges: The title search can reveal any liens or encumbrances that may affect the property's value or transferability. For example, there may be unpaid taxes or other liens that need to be cleared before the property can be transferred.
Mortgages are typical on a property title because when a person takes out a mortgage to buy a property, the lender places a lien on the property, which means that they have a legal claim to the property as collateral for the loan.
To Verify Other Chages & Potential Legal claims: Reviewing the title search can protect the buyer from legal claims against the property. For example, if there is an easement on the property, it may affect the buyer's use and enjoyment of the property.
Easements are more typical with strata properties (condos & townhomes), than with detached homes because of the shared ownership and use of common areas and facilities within the strata property, such as: parking areas, hallways, elevators, and recreational facilities. In order to provide access to these common areas and facilities, it is common for easements to be created in the strata plan, which allow each owner to use and access these areas.
On the other hand, detached homes typically do not have shared ownership or use of common areas with other properties, and therefore, do not typically require easements. The owner of a detached home generally has exclusive ownership and control of their property, including the land and any structures on it, and does not need to share access or use of these areas with anyone else.
To verifty there is NO “Duplicate Indefeasible Title” - A Duplicate Indefeasible Title is a second copy of the original title that has the same legal weight as the original. This means that two people can hold a title to the same property, creating a situation where there are conflicting claims to ownership. This can lead to disputes, legal challenges, and potentially costly litigation. It is important to ensure that there is only one valid title for a property to avoid any confusion or legal issues.
In summary, reviewing the title search of a property is crucial to ensure that the buyer is getting a clear title, free of liens and encumbrances, and that there are no legal claims against the property. As a Realtor, it's your job to help your client understand the importance of the title search and guide them through the process of reviewing it.
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