{"id":3830,"date":"2024-03-18T10:29:29","date_gmt":"2024-03-18T14:29:29","guid":{"rendered":"https:\/\/www.deeds.com\/articles\/?p=3830"},"modified":"2024-06-16T23:13:03","modified_gmt":"2024-06-17T03:13:03","slug":"real-property-basics-what-is-a-clear-title","status":"publish","type":"post","link":"https:\/\/www.deeds.com\/articles\/real-property-basics-what-is-a-clear-title\/","title":{"rendered":"Real Property Basics: What Is a Clear Title?"},"content":{"rendered":"\n
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A clear title.<\/em> The term is commonly used to mean the deed holder can prove ownership, unquestionably. To verify that, a title company can conduct a title search<\/em><\/a>.<\/p>\n\n\n\n

Other parties\u2019 claims on the title are called title defects<\/em>, or clouds on title<\/em>.<\/p>\n\n\n\n

What do these claims look like? They might be mortgage liens, court judgments, contracts with renters, solar contracts, or any agreements to allow access to part of the property. There could be unpaid taxes in the past, claims by relatives involving their rights in foreclosures or inheritances, even liens for fees and fines imposed by homeowners\u2019 associations.<\/p>\n\n\n\n

Having a clear title matters to a homeowner. Selling isn\u2019t an option while there are liens or claims against the title. Straightforward enough\u2026 But there are some finer points worth knowing.<\/p>\n\n\n\n\n\n\n\n

Clear Versus Marketable<\/h2>\n\n\n\n

Although we talk about a clear title when we mean a home is free of any defects that could stop a sale, legally speaking, that\u2019s a marketable title<\/em>.<\/p>\n\n\n\n

Whose title is clear from zoning restrictions, setbacks from the roads, easements for utility servicers, a shared driveway or something else? Maybe there\u2019s a hiking path that the local trail club has permission to use, or a pathway to a boat dock\u2026 And that\u2019s usually just fine. As the Independence Title company puts the point:<\/p>\n\n\n\n

Most titles are marketable titles. These have encumbrances on the deed, but none of the encumbrances cause concern for litigation or property sale.<\/em><\/p>\n\n\n\n

And most homeowners have some kind of financial lien(s). Homes usually have mortgage loans or home equity lines of credit (HELOCs<\/a>) recorded on their titles. Nevertheless, the title is marketable if defects can be resolved by closing day. They usually can. So, in most cases, sellers mark \u201cNO\u201d where the disclosure form asks: “Is there any reason you know, including any title defects, that would obstruct you from conveying clear title?”<\/p>\n\n\n\n

The seller should bring any known issues to the attention of their agent so the title company can resolve them. If the buyer accepts a title with disclosed defects, the buyer may not expect to hit the insurer up for coverage on those known issues.<\/p>\n\n\n\n

Is a home\u2019s boundary or easement under dispute? Then a <\/strong><\/em>property survey<\/em><\/strong><\/a> isn\u2019t just nice to have; it\u2019s essential.<\/strong><\/em><\/pre>\n\n\n\n
What If a Home Has an Unmarketable Title? How Can the Parties Be Cleared to Close?<\/h2>\n\n\n\n
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When the time comes to sell a property, the owner should clear any tax liens, zoning or permitting violations, and the mortgage (which can be paid off at closing if not before). The buyer\u2019s lender will want all of this addressed before issuing the loan. This is why lenders need the title search. Loan approval depends on knowing:<\/p>\n\n\n\n