Vernon Real Estate Lawyers Assisting with Examinations of Title & Title Searches
Title searches form a part of nearly every real estate transaction. Before a new mortgage can be registered against a property, or before a property changes hands, it is imperative to search the property’s records for any discrepancies, or encumbrances that must be removed to protect the interests of a lender or new buyer.
What is Title?
Title refers to the ownership and physical description of the land as registered with the Land Title and Survey Authority, as well as any encumbrances that may be registered against it. An encumbrance refers to any right against the property held by someone other than the property owner, such as a right-of-way, a mortgage, a lien, or an easement.
What is ‘Clear Title’?
Clear title refers to title that is clear of unnecessary encumbrances. Some encumbrances are required and will remain on title as the property changes hands. For example, the properties in a subdivision may be subject to an easement across a portion of the front lawn in favour of a telecommunications company to allow for access in the event of repair or replacement of cables buried underground. This is something that cannot be removed when transferring ownership and is considered a necessary encumbrance.
In contrast, other encumbrances are unnecessary and hinder clear title. An example would be a construction lien registered against land to secure a contractor’s debt, or a private mortgage that must be paid and/or discharged from title before the property is sold. If left on title, these encumbrances would become the responsibility of the purchaser to remove before selling the property in the future.
The real estate lawyers at Cherkowski Marsden LLP will flag any such encumbrance on title and work with the seller’s lawyer to make sure they are paid and removed prior to transferring ownership to you.
The Importance of an Accurate Legal Description
It is also important to ensure the legal description included in the property’s title is accurate. As opposed to the municipal address, the legal description contains the geographical limits of a property. If not, the rights you actually purchase may be different from appearances. If the legal description has any defects, we will notify you right away and work to rectify the situation with the vendor’s lawyer.
Upon receiving your file, your lawyer will carefully search and review the title to the property as soon as possible in order to identify and address any concerns that may need to be dealt with ahead of closing. Leaving the review of title to later in the process can result in a scramble to properly address these issues at the last minute, which we always want to avoid in order to ensure a timely closing. Most purchases are issue-free with respect to the title, but because issues can require the action of others in order to properly address them, we are always careful to prioritize the title search so that we have time to handle anything that may come up.
What is Title Insurance?
Title insurance refers to a policy aimed at protecting mortgage lenders and property owners from a variety of risks, including fraud and hidden defects on title. A careful property search will almost always avoid issues with title arising after a purchase, and as such the predominant concern for most parties is fraud. It is not difficult for a person to obtain false identification, which allows them to work with a real estate lawyer to fraudulently sell a property or obtain a mortgage from a lender and register it against a property that does not belong to them. Title insurance protects both lenders and owners in the event of such an occurrence, covering the costs of rectifying the situation and restoring title to its proper form.
Title insurance is often required by a lender before they will authorize the release of mortgage funds for a purchase. Even if it is not required, we recommend that purchasers always obtain a policy to protect their interests, as the cost is far outweighed by the security a policy provides. We will review the benefits of a policy with you and will handle the purchase on your behalf as part of your closing.
Contact the Real Estate Lawyers at Cherkowski Marsden LLP for Skilled Title Examinations and Advice on Title Insurance
Contact the experienced real estate lawyers at Cherkowski Marsden LLP in Vernon, British Columbia for advice with respect to any concerns with respect to your property’s title, or about purchasing a title insurance policy. You can reach us online or by phone at 250-308-0338.