This month's California Real Estate Magazine reviews the importance of obtaining a title report and discusses various issues surrounding clouds on title. Home buyers need to pay serious attention to the preliminary title report that they review prior to settlement. Additionally, home buyers must understand that title insurance is vital to protecting your rights to the property that you purchase.
What Is a Title?
Title is a term for a bundle of rights in a piece of property in which a party may own either a legal interest or an equitable interest. The rights in the bundle may be separated and held by different parties. It may also refer to a formal document that serves as evidence of ownership. Conveyance of the document may be required in order to transfer ownership in the property to another person.
What Are Clouds on the Title Report?
Any document, claim, unreleased lien, or encumbrance that may superficially impair or injure the title to a property or make the title doubtful because of its apparent or possible validity is referred to as a cloud on the title. Clouds on title are usually uncovered in a Title Search.
These clouds range from a recorded mortgage paid in full, but with no satisfaction of mortgage recorded, to a property sold without a spouse's release of interest, to an heir of a prior owner with a questionable claim to the property.
The property owner may initiate a quitclaim deed or a quiet title proceeding to remove the cloud on title from the record.
What Should Buyers Do?
If you are a buyer who has already procured a property, make sure to review the Preliminary Title Report and follow all of the instructions in the article hyperlinked above! If you need any help, feel free to contact me!
Comments(4)