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Building a Solid Foundation: Why Title Searches Are Essential for Homebuyers

When working with a closing agent such as a title company or law firm, one of the first steps in their closing process should always be to order, review and circulate a title search or commitment. A title search is prepared to include a list of items that must be resolved, prior to issuing the policy; this document is called a title commitment. This key document can make or break a closing, which is why it is important for buyers, sellers, and Realtors to understand the information they contain. Working with a knowledgeable attorney can not only help with understanding, but also with correctly resolving any issues.

What do title searches tell us?

Title searcher reports are generated using information and documents recorded in the public records to review the 30-years of history for a specific property. Key documents searchers look for are deeds, mortgages, liens, payoffs or satisfactions of liens, tax payments, death certificates, and affidavits. Searchers use these documents to create a clear property transfer history, also referred to as a chain of title. If there appears to be a break in the chain of titles, or an inexplicable transfer occurs, searchers may require more information. If the search is ordered to issue title insurance, any question in findings will have to be resolved and explained. The requirement to fix this issue falls with the title company or attorney conducting the closing, which is why it is vital to work with a knowledgeable closing agent who can assist with correctly preparing the required documents. If a title issue is not resolved correctly whether it be overlooked during the closing process or the closing agent makes an error while preparing the documents, it can become an exclusion to coverage under a title insurance policy and result in devastating consequences down the road.

Are there problems title searches cannot tell us?

Yes! Even the most thorough title search could result in missed documents or information. If a key document such as a deed, mortgage or lien document is not recorded in the public records, it would not typically be found during a standard title search. Other issues resulting from human error, such as the misspelling of names, improperly stated or changed marriage status, or incorrectly typed legal descriptions, could all result in an overlooked legal claim to the property or the documents being omitted during a search. Furthermore, the documents reviewed during the search may not always alert searchers, closing agents or buyers to forged or defective deeds, clerical errors, confusion over similar or identical names, and more. These defects could arise after closing on the property or could be the result of an error that occurred during the closing process.

How are title defects resolved?

If title defects are identified in the title search, it is important to resolve them immediately. Liens and claims of ownership to the property can not only impact how the property is enjoyed but can also jeopardize ownership rights. Various defects can be resolved using specific and tailored affidavits or by recording supporting documents, while others may require showing proof of payoff or satisfaction. If a title defect is so serious that it cannot be resolved by recording specific documents, litigation may be required to seek assistance from the courts.

Regardless of how easily fixing a title issue may appear, having an attorney review and preparing the necessary documents is always the best option. Title issues do not simply disappear on their own and can even become harder to resolve the longer they are ignored. If you are closing on a property, remember that any advice or insight provided about the title search, unless provided by the authorized closing agent issuing a title insurance policy, is considered the unauthorized practice of law, which is a third-degree felony in the state of Florida. Working with a knowledgeable attorney can not only help with understanding, but will save you time, money, and heartache in the future. Contact our office to discuss how the attorneys at Lacey Lyons Rezanka can protect your best interests and take the uncertainty