The Significance of Title Searches
When purchasing real property, it is important to have your attorney conduct a title search to ensure that there are no claims against the real estate. With an accurate title report, remedial action can be taken prior to making a large investment. The cost of a title search is minimal in exchange for the priceless peace of mind you receive.
At the Law Offices of Matthew L. Holden, LLC our experienced team always provides you with an accurate review of a complete title search, whether you are buying residential or commercial real estate.
A title search will investigate, among other things, the following:
- Liens: This is the right of a lender or government agency to keep possession of a property until a debt owed is repaid. If there is a lien on the real property, the seller may not be able to legally sell it. For example, if the title owner has a debt to the IRS of unpaid federal taxes, the federal government can place a lien and block any sale until it is paid.
- Bankruptcy: If the seller is involved in a bankruptcy, the real estate may be tied up until the bankruptcy proceedings are completed. Bankruptcies can be complex so it is important to contact your attorney right away. You should resolve this issue before spending money on an appraisal or home inspection. In some cases, it may be simpler to drop the purchase and find a property that is not subject to a bankruptcy.
- Easements: This is the legal right to use part of the real property, such as a utility company's right to run power lines. Easements do not necessarily prevent the sale from being completed, but provide important information to a potential buyer about the rights and obligations other parties may have with respect to the real property.
- Encroachments: This refers to a situation where a real property owner violates the property rights of an adjacent real property owner (a "neighbor") by building on the neighbor's land or having a structure hang over your property line from the neighbor's property. If your attorney fails to alert you that an encroachment exists prior to the purchase of real property then after closing you may find yourself initiating a lawsuit against your neighbor or being sued. Either way, this has the potential to start the relationship with your neighbor on the wrong foot.
The team at the Law Offices of Matthew L. Holden, LLC will identify any of these issues during their review of the title report and will advise you regarding the most time and cost efficient options. If title to the real property is not "clear", you should not be obligated to finalize the purchase. You will find that money spent on the title search - and the associated legal advice - is well worth it in the long run.