There are many checks you should carry out before purchasing a property. One of the most important is to ensure the real estate has a clear title.
A clear title means that no one else has an ownership claim on the property. In other words, when you buy it, it becomes yours and your alone.
What is a clouded title?
When the real estate ownership is unclear, people say the title is clouded. There may be one cloud, or there may be several. Here are a few that could occur:
- Paperwork problems: The old man you are buying from may have lived in the property all their life, and their parents and grandparents may have lived there before them. That does not mean it is legally theirs. If someone cannot show you a deed that is correctly inscribed in their name, with the boundaries correctly marked out, you might want to walk away or ask them to clear the title first.
- An inheritance dispute: If someone is selling a property they have inherited, make sure that there are no pending will contests or disputes over the property. If there are, you need to wait until they are resolved before handing over money.
- A lien: This means someone has a legal claim to the property. They may have a claim on it all, or just to a certain amount. People or companies can place a lien when a property owner owes them money. It prevents the owner from selling the property until they have cleared the debt. There are ways to purchase a property with a lien by agreeing to pay it off during the deal.
You can quickly rectify some title issues. Others could trouble you for years to come. Ensuring the real estate title is clean before you proceed is crucial.