What exactly is title?
The practice of real estate concerns understanding how property is affected by a property owner in the chain of title. An owner of property can restrict and convey property while they own it. Once they convey the property, they no longer have the ability to restrict or convey that property but the property remains subject to the restrictions they placed on it while they did own it.
Similarly, personal judgments and liens can attach to real property while it is owned by an individual. Judgment creditors can execute their judgment to partition and/or sell the property to satisfy the debt. Even if a property is transferred or sold, it remains subject to that owner’s judgment.
What do we do? Who is involved?
Our primary role is to represent buyers purchasing real estate. We have to make sure title to the property is clear so that 1) the client will want to buy it and 2) the lender, if any, is willing to lend money for the buyer to purchase it. In order to have clear title, we have to search the title to the property AND obtain title insurance for the buyer and lender. In order to do this we have to make sure the title insurance company, lender, and buyer are happy with what we find.
How do we deal with what we find?
We make a list for the title company of all acts affecting title that occurred in the title search period.
The title company splits this list into two parts; items they agree to insure and those they won’t:
Restrictions: These items affect title, are not removed from title, and therefore are not covered and insured by title insurance. This class of items include easements, restrictive covenants, and boundary line setbacks. The thought here is that if you build a fence in the Duke Energy easement area and Duke Energy has the fence removed, you cannot make a claim on your title insurance policy for it. In addition, you probably want power, so the attorney will not take any action to remove the easement.
Requirements: These items affect title and have to be resolved by the real estate attorney. When resolved, these items are insured by the title company. This class of items includes judgments, liens, mortgages, foreclosures, and estates. The real estate attorney is responsible for certifying to the title company post-closing that judgments are paid, liens are removed, mortgages are paid and satisfied, any foreclosure in the chain of title was done correctly and wiped out all junior liens, and that estates were opened where necessary, wills were probated where necessary, and notices to creditors were run where necessary.