When you retain the services of a real estate law firm to help you with the purchase of a property, one of the first things they'll want to do is to perform a title search. You may wonder what the big deal is, so take a look at what a lawyer is trying to spot when they do this.
This is the biggest fear regarding any title search. Fraudulence can arise from several sources.
One common problem involves titles that are illegally obtained using stolen information from the proper owners. People who steal titles this way often use them to obtain loans and leave the owners footing the bill. Some people don't even discover the issue until a title search is performed.
Another problem may involve a title that was misrepresented. For example, there might be an outstanding lien against the property, but the owner is selling it like no one else has a claim. Given that a lien holder can take the property even from a new owner, that's something you want to know before you buy.
Outstanding Legal Actions
Properties are often put up for collateral, frozen in probate, or held as part of a judgment. They also may be subject to legal action due to violations of building codes or environmental regulations.
Long-Term Issues With the Property
Many properties will change uses over time. A garbage dump might be reclaimed to create a residential development, and the site will be subdivided into lots. Even if that idea doesn't bother you, it's still something you have a right to know. Similar problems involve sites that have suffered chemical exposure due to illegal drug labs, toxic waste, or nearby pollution.
Accuracy of the Property Lines
People break off little pieces of real estate from time to time for many reasons. A previous owner might have sold a corner of the property so a neighbor could extend their garage, for example. These tiny modifications don't seem like much until they become the basis for a boundary dispute.
The county register keeps a lot of details regarding every property. Among the things they track is who owns which rights. You might be interested in a rural property because there's prime timber on it. That's a great selling point as long as you can legally transfer or exercise those rights, but it's going to get hairy if someone else has a claim. Similar issues apply to water, gas, and mineral rights on properties, too.