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What is a title and how can I ensure that it's clean?

When real estate professionals or attorneys ask about who holds a "title" to a property, they generally are looking to ascertain who is recorded as the legal owner of a piece of land or a building. Clear titles afford the individual holding them the right to use or sell that piece of property largely at their own discretion, provided that it's in accordance with local regulations and laws.

A buyer shouldn't assume that a title is clear just because someone is offering a property for sale. Further, you should not assume that just because you've made timely payments on your mortgage that you have a clear title. It is possible for the title on your property to move between being clear when you finally pay off your mortgage to defective.

This often occurs when a lien has been placed on the property for unpaid taxes, repairs, code violations or another vendor. Payments to these individuals are generally court ordered and must be made before the title can be cleared.

In another instance, a proper title search may not have been conducted, a sales contracts or closings not properly executed or there's been an adverse possession. It's possible for a person, or their heirs, to make a claim to the property as if it were their own, rendering the title as defective.

Another situation in which a title may be defective is if there were outside agreements, known as covenants of record, made between the land's owner and another individual to allow them use of the land. An individual may have been given perpetual rights to fish and camp on a piece of land, for example. The title may be considered defective because every time the property is sold, a disclosure of someone else's right to it has to be made.

Buyers can protect themselves by having title searches done before they finalize a purchase. It's even possible for the buyer to have the purchase agreement written so that it's only finalized if the title comes back clean.

Whether you plan to verify that a title is clean or to have your purchase contract reviewed and contingencies added, a Michigan real estate attorney can provide guidance in your legal matter.

Source: FindLaw, "What Does Title Mean?," accessed Oct. 06, 2017

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