Whenever you are purchasing a property, you want to make sure that everything is going on smoothly, so you have the least possible amount of stress and get this ordeal over with. A lot of times it can also be a dream coming true—you are acquiring your first ever home, or you are buying a property for your business that is thriving and expanding. In any case, there is always a great deal of excitement that comes with the purchase.
Thinking about those situations, there are a few steps you must take to achieve your goals. Having a Calgary real estate lawyer with you will decrease the stress, time, and likely the investment that you will need to spend. Those trained professionals are used to the process and have knowledge of the law and how to navigate it, in order to guide you through it. No matter if you are a first-time homeowner or if you have multiple buildings for your business, a real estate lawyer is your number one resource to guarantee success.
One of the steps of buying a property, however, is quite more important than others. Although it may not seem so, the title search phase is no easy task. We will understand in the following topics what exactly is a title search and why they are so important.
What is a Title Search?
A title search is, in a few words, an examination of public records in order to confirm that the seller is actually entitled to sell you that property. When conducting the selling or buying of a business it is understandable if you assume that the seller is entitled to sell the property—but this assumption can come with terrible consequences if there is anything blocking the transaction from happening.
The reasons why someone would try to sell a property while not being legally able to can vary from a plain, old scam, where you risk falling victim to a series of crimes, or it can simply be that the co-owner needs their spouse’s permission to sell the family home.
This title verification is done as part of the due diligence to ensure the transaction can occur without any issues and is normally done by your real estate lawyer as they are more used to the process and how to ask for a title search.
Why is a Title Search so Important?
As mentioned, the title search exists to ensure the seller has the ability to actually conduct this transaction. Without it, you may discover later on during the process that there is something blocking the transaction from happening.
There are several situations that may create a barrier between you and the property you are interested in. The property may have a claim against its title that the current owner may not even be aware of. There may be debts associated with the property so you need to be aware of restrictive covenants.
Mortgage lenders will often require title searches to approve a loan, as well as title insurance. Unpaid property taxes, homeowners’ association fees, and past bills can all come back to haunt you if a title search is not conducted or fails to find them.
How do Title Searches Work?
Normally conducted by a lawyer or a title company, a title search will dig up any financial or legal claims of the property, so every aspect of the transaction is transparent.
A lawyer will conduct an investigation of public records and draft a document called a chain of title. The chain of title is a document that shows the chronological history of a property, from the current owners to the past ones.
Having this document drafted for you can make understanding the pending property issues much easier. It can be a large amount of work to come up with all of the necessary documents for it, as you never know how complex the transaction may be before you actually start to dig them up.
Having all documents in order can create much-needed peace of mind when doing a large transaction such as a real estate one. Since those documents can be quite confusing to the untrained eye, it is always a good idea to have a real estate lawyer taking care of this part of the transaction for you, so you have your best interests and rights protected at all times to the best capabilities.
A title search normally takes between 1 to 2 weeks to be done properly, but the time varies depending on the complexity of the case at hand.
Overall, having a title search conducted and in place during your transaction is absolutely one of the most important aspects of purchasing a property. It will protect you from bad surprises and will work as a piece of document when finding a mortgage lender.