Legal Definitions - title report

A title report is a comprehensive document that provides a detailed legal history and current status of a specific piece of real estate. It is generated after a thorough investigation, known as a title search, into public records related to the property.

The primary purpose of a title report is to identify who legally owns the property and to uncover any potential issues that could affect that ownership or the property's value. Key information typically found in a title report includes:

• The full legal description of the property.
• The names of the current legal owners.
• Any existing financial claims against the property, such as mortgages, unpaid property taxes, or contractor liens.
• Easements (rights for others to use a portion of the property, like utility access).
• Covenants, conditions, and restrictions (rules governing how the property can be used).
• Records of past ownership transfers and any disputes or judgments related to the property's title.

Buyers, especially those obtaining a mortgage, typically request and pay for a title report before finalizing a property purchase. Lenders almost always require one to ensure their collateral (the property) has a clear and marketable title. This process helps protect all parties by revealing hidden problems that could otherwise lead to significant legal or financial complications after the sale.

Here are some examples of how a title report is used:

• Residential Home Purchase:

  Imagine the Chen family is buying their dream home. Before closing the deal, their lender requires a title report. The report confirms that the current seller, Mr. Davies, is the sole legal owner and that the property has an existing mortgage that will be paid off at closing. Crucially, it also reveals a previously unknown, decades-old utility easement running underground through the backyard, granting the local water company access for maintenance. While not preventing the sale, this information allows the Chens to understand their property rights and potential limitations before they commit, ensuring there are no surprises regarding access for future landscaping or construction plans.

• Commercial Land Development:

  A real estate development company, "Horizon Builders," plans to purchase a large parcel of undeveloped land to construct a new office complex. Their title report uncovers not only the current owner but also a forgotten property tax lien from a previous owner dating back several years, which must be settled before a clear title can be transferred. Additionally, the report identifies a restrictive covenant placed on the land by a former owner, limiting the height of any structures built on a specific portion of the parcel. This information is vital for Horizon Builders, as it directly impacts their architectural plans and overall project feasibility, allowing them to negotiate or adjust their strategy before investing further.

• Inherited Property Sale:

  After her grandmother's passing, Maria decides to sell the family home. To ensure a smooth transaction, she orders a title report. The report confirms her grandmother was the sole owner and that the property is free of any current mortgages. However, it also brings to light an old, unreleased lien from a home equity line of credit her grandmother had paid off years ago but was never formally removed from the public record. The title report identifies this administrative oversight, allowing Maria to work with the title company to get the lien officially cleared before listing the property, preventing potential delays or issues for a future buyer.