WHAT IS A TITLE
Search?
A title search is a process conducted to determine the legal ownership and history of a piece of real estate. The search involves examining public records to identify the property's current owner and how they acquired it (chain of title), any claims or liens against it, and any restrictions or easements that may affect its use (clouds on title).
The title search is essential for ensuring that the property is clear of any legal issues before a sale. It's a critical step in real estate transactions to ensure that the buyer is getting a clean title with no surprises that could affect their ownership or use of the property in the future.
Ownership History
Verifies the chain of ownership and ensures the seller is the legal owner of the property.
Liens or Claims
Identifies any outstanding liens (like mortgages, unpaid taxes, or judgments) or claims against the property that need to be resolved before a sale can proceed.
Easements or Restrictions
Find any easements (rights others may have to use part of the property) or deed restrictions that could affect the buyer's use of the property.
Encumbrances
Checks for any encumbrances, such as rights of way, which could limit the property’s use or decrease its value.
Legal Descriptions
Confirms the exact legal description of the property to avoid boundary disputes or misunderstandings about what is being purchased.
Types of Title Insurance
Owners Title Insurance
While a title search can reveal the clouds on the title which are documented and recorded, it might not be the full picture. In most real estate transactions, the buyers purchase an owners title insurance policy to assure they have purchased a valid title.
In those transactions where title insurance is involved, the title company must determine the insurability of the title as part of the search process, which ensures the existence or non-existence of rights to the property.
The title insurance company will, at its own expense, defend and will pay losses within the coverage of the policy if they occur.
Lenders Title Insurance
The mortgage lender is as concerned as the buyer about the quality of the title because the property is to be secure for the new mortgage loan. The mortgage lender requires assurance that it has a valid first mortgage lien on the property. This is not only common sense but generally is a legal requirement of regulated mortgage lenders.
The lender's title insurance, however, doesn't protect the new buyer of the property. Although the land is the same, the interests of the buyer and the interests of the lender are very different. The provisions of a lender's title insurance policy are very different from those of an owner’s policy, so the buyer should obtain his own policy, often issued simultaneously with the lender's policy.
Used with permission of Chicago Title Insurance Company
Knowledgeable
& Friendly Service
If you are relocating to Kentucky, contact the Louisville real estate lawyers of The English Law Group, P.S.C. for a phone consultation. We will take care of all the details to minimize your need to travel to Kentucky before the closing.
Questions About Title Insurance?