We Understand The Ins And Outs Of Real Estate Law
What does it mean when real property has a “clean” title?
When someone says that a piece of real property has a “clear title,” they mean that the ownership of that property is free of any legal issues, liens and other concerns that immediately provide grounds upon which title disputes could be filed.
A clear title is important for buyers, sellers and lenders alike, because it confirms that the person or entity that is selling a piece of property has the legal right to do so without encumbrances that could create problems down the road.
What this means in practice
A title is a legal term that refers to ownership of real estate. With that said, just because someone occupies or uses a property does not automatically mean they have a clear title to it. Common issues that can cloud a title include outstanding mortgages, tax liens, unpaid contractor bills, inheritance disputes, easements and clerical errors in past deeds. Even something as seemingly minor as a missing signature on a past title transfer can create complications and inspire legal disputes.
When a property has a clear title, none of these problems are present. That means that no one else can legally claim an interest in the property, and no third parties have rights that could interfere with the new owner’s use of the property.
In most cases, a title search is performed before a real estate deal is finalized. This is typically conducted by a skilled legal team. The search looks through public records to verify ownership history and check for any existing issues. If problems are found, they must be resolved before the transaction can move forward. This could involve paying off debts, correcting errors or negotiating the release of certain claims.
In short, taking the time to confirm a clean transfer of ownership before finalizing a purchase can potentially prevent major headaches later.