A title with no lien, or levy from creditors or other parties that could pose a question as to who the legal owner of a property is. If you own a home with a clear title, it means that you are the sole, undisputable owner, and no other parties can make a legal claim, or any other sort, against the property’s ownership. In order to have a valid real estate transaction, like the sale of a property, you must have a clear title. Another way of saying this is that you have a “clean title”. Going into a real estate transaction with a clear title helps you understand that this transaction comes with no strings of outstanding financial responsibilities of past owners attached to the property you are purchasing. This also lets you know that the seller truly has the right to sell the property to you. The presence of a lien would create a cloud, meaning that the title is not clear. The sale of a property is disputable if the title is not represented as clear, since that means other parties can lay claim to the property. An unknown and unreleased lien would also play into this as well since that would mean there is a cloud on the title. If a title is not clear this would mean that the new owner could be held responsible for any financial resolution on the liens incurred prior to their ownership. If the title needs to be cleared, the title company would go about doing so, because it would need clarification in order for the deed to be registered in the new homeowner’s name. The deed is the legal documentation that shows who owns a particular property. Case-in-point if a buyer is purchasing a property the title needs to be cleared prior to being placed under their name on the property deed. Legally there is nothing that would require a lien to be removed prior to the sale of a property, but it is in the buyer’s best interest. Some of the reasons it might be more complicated to get a clear title are:
Heirs
Older properties have this issue more often than newer construction, because the heirs find out about the property too late, and must file the deed with the county clerk’s office, transferring ownership to themselves. If this step is done incorrectly there will be issues that arise with the title as the deed would show that the deceased willed the property to their heirs. This is another reason why title insurance is incredibly important.
Fraud
It’s possible that a false deed was entered into the public record of the property you are trying to obtain title on. It’s also possible that this false deed was used in the illegal sale of a property and then through the passage of time became an issue for the present owner or title holder. Any fraudster worth his weight in lies could attempt to use a falsified deed to fabricate an illegal property sale. This gets filed with the county clerk’s office because it looks official and they were able to take everyone for a ride.
Divorce or Separation
If a couple goes through the process of a separation but never goes through the process of divorce proceedings, and they owned a house jointly, though one moves away, they still own the house. This would cause issues when the person still remaining in the property tries to sell, because the property would be under both ex-spouses’ names. (One way that this can be avoided is by having the spouse that will move out of the property sign a quitclaim deed, forfeiting their rights to the property.)
Trust
Ownership of the property could have been transferred to a trust. A trust is a guardian, or trustee, that has a legal claim to the property. This is something that a title search would clarify, it is best to have this knowledge prior to putting down any capital on the real estate transaction.
To review, a clear title means that the property has no liens on it and that you can rest easy knowing that there is nothing in your property’s past that will cost you sleep and finances. Gables Title Group is always ready to help when you purchase or refinance your real property.
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