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All About Title - What Is Title?

All About Title - Overview
All About Title - What Is Title?
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All About Title - What Is Escrow?

What Is Title?

Land is as old as time itself. Like the structures built on it, land is “real property", meaning that it can’t be moved or hidden. Because real property is valuable, many people want to claim ownership. “Titles” came about as a means of legally proving who owns the property.

Through the year, a parcel of property may change hands dozens of times. At any point along the chain of ownership, problems may arise that cast a “cloud” over a title, putting a claim of ownership in doubt.  Examples include:

  • Long lost relatives or past owners could show up, sometimes from long ago, with a claim to the property that supersedes yours.

  • Sometimes people fraudulently sell houses that don't belong to them. For example, the husband of a divorcing couple could forge the signature of his wife, and abscond with the proceeds of the sale. In a court of law, the rights of the wife could be upheld and the property could go to her, no matter how much money an unsuspecting purchaser had placed in the house.

  • To obtain loans, people often use property as collateral (security against nonpayment). If someone doesn’t pay back a loan, the lender holding the lien has a legal right to sell the property to get the money to repay the loan—even if the house has since sold to a new owner. The lien on the house if the lender's claim to the property as payment on the debt. Unless the debt is repaid and the lien released, the lien stays with the house even when it changes ownership.

  • With today’s booming refinance and home equity markets, lenders’ interest in properties has increased exponentially and both lenders and county recorders are challenged to keep up with the documentation. It’s more likely than ever that an unrecorded or unreleased interest in your property could be out there, making title insurance more important now than ever.

  • An easement is a right to use the land of another for a special purpose. For example, the city may have plans to build a sewer line sometime in the future. If the sewer line runs through the back of your yard, and if the city has an easement on the underground portion of your property, this might cause you to lose your prize roses, or prevent you from building a pool in your back yard.

  • If a homeowner fails to pay property taxes, local, state or federal tax authorities can obtain a lien on the home, which gives the government a claim to that property in case of nonpayment of debt. If the owner sells the home without settling the tax lien, the tax authority can legally ask the new homeowner to pay the original homeowner's back taxes. And if the new homeowner fails to comply, he could lose his new home.

  • How do you protect yourself from mistakes, fraud and other complications? Through title insurance.  It protects your claim to your property from potential problems caused by irregularities that may have occurred in the past.  Dollar for dollar, it’s one of the most cost-efficient forms of insurance for home-owners. A one-time premium covers you against legal problems that could cost tens of thousands of dollars—and even the loss of your home.—for as long as you own your property.
  What Is Title?