Should I Have a Lawyer Review My Title?
Whether you are buying your first home, a second vacation home, or an investment property, the title is one of the most important documents you will encounter during the transaction. Any defects discovered during a title search can sink a deal.
A skilled lawyer assesses title issues and recommends the best course of action based on their findings. If you are getting ready to purchase property, consider working with a lawyer to avoid costly and frustrating delays that can derail your sale.
What Is a Title Search?
Before a property is sold, the title company performs a title search. They search all available public records related to the ownership of the property. They look at past deeds, assessments, mortgages, liens, wills, and divorce settlements. Any debts against the property are identified. The property’s rightful owner is also verified during the title search.
It is not uncommon to find problems during a title search. These problems must be corrected before the sale can proceed. Common defects include liens, judgements, and bankruptcies. It is important for buyers to know that any claims against current or past owners must be satisfied and cleared on the public record before the property can be transferred.
It is a common misconception that a title agent can advise the buyer regarding defects; that is not their role. Title companies and title agents are not legal experts. They work for the title insurer and have their best interests in mind. The services of a title company are no substitute for sound legal advice.
What Is a Title Abstract?
All of the information collected during the title search is compiled into a title abstract. The title abstract is distributed and reviewed by all the parties involved. A “clear” title means the seller is free to transfer the property and the transaction can proceed.
The guidance of an experienced lawyer is invaluable at this stage. An experienced lawyer knows what to look for in a title abstract and how to advise their client accordingly. The average person may not know what to look for in a title abstract and may not catch red flags that can lead to costly and stressful problems in the future.
Title insurance only covers issues that arise later. Any defects discovered during the initial title search are considered exceptions. If these excluded defects cause problems for the buyer once they own the property, they cannot turn to the title insurance company for assistance.
Exceptions Can Be Problematic
It is common for the title company to list exceptions when they issue insurance. Many of these allowable exceptions are minor and should not be of concern.
One example of an acceptable exception would be an easement giving the local utility company the right to access cables or power lines as needed. That is a reasonable, and often necessary, stipulation. Some exceptions, however, can be problematic if they impact ownership of the property and how it is used.
The insurance company can make an exception based on items included in the property survey, for example. If these items go unnoticed and unresolved before closing, you could end up with unwelcome expenses that are not covered by title insurance if you go to use the property in a way that is prohibited per the title insurance.
A lawyer will thoroughly examine the title, review the exceptions, and determine if any are unacceptable. Most purchase agreements contain a provision that makes the sale contingent on the buyer’s acceptance of the title. This is the ideal opportunity to consult a lawyer who focuses on real estate litigation matters.
What Are the Benefits of Working With a Real Estate Lawyer?
Buyers and sellers are not required to hire a lawyer. However, whether you are closing on your starter home or investing in a multi-million dollar business property, every real estate transaction is complex.
With so many moving parts, people, and paperwork, it is easy to feel overwhelmed. The documents and contracts involved with any sale have far-reaching legal and financial implications.
That is why it makes sense to retain a lawyer. A lawyer will explain all of your rights and responsibilities and protect your interests through every stage of the process.
Annapolis Real Estate Lawyers at Oliveri & Larsen Provide Custom Legal Solutions
Our Annapolis real estate lawyers at Oliveri & Larsen provide solution-driven legal services for residential and commercial clients. With our legal team in your corner, you will have peace of mind knowing your interests are protected. Call us at 401-295-3000 or contact us online to schedule an appointment. Located in Annapolis, Maryland, we represent clients in Ocean City, Anne Arundel County, Baltimore County, Baltimore City, Calvert County, Harford County, Howard County, Queen Anne’s County, St. Mary’s County, Worcester County, Kent County, and the upper and lower Eastern Shores of Maryland.