In real estate matters, one of the most important questions concerning a parcel of land is whether there is “good title.” If there is, you may proceed as you see fit. When concerns exist, you should consider whether if they can be resolved or if the risks posed are worth taking. Either way, failure to confirm good title before you move forward can prove costly.
“Good title” sounds like the only question is whether a person owns the subject property. In truth, that is only part of the problem. This is a multi-layered issue, with three primary concerns that must be addressed:
- Who holds an interest in the property?
- How was that interest acquired?
- Is there anything that raises doubt as to the validity of the interest?
The first two questions concern “record title,” proven by documents that set forth the title history and provide that information. A deed or mortgage is an example of such a record, but court filings and other publicly available documents may also qualify. Title is “clear” once you establish record title.
However, the third question must be addressed to determine whether title is marketable. Title concerns have myriad sources, but not all of them are major threats. An encumbrance such as a mortgage or lien may be disposed of by paying the amount due. Other issues, conversely, can linger undetected for decades.
For instance, the record owner’s death has the potential to ruin title if his estate is not probated. Under those circumstances, the owner’s interest passes pursuant to intestacy law. There is no record memorializing an intestate transfer, so the decedent’s heirs can unknowingly become interest holders. Over a few generations, title may splinter into dozens of small interests, rendering a parcel unmarketable until the disparate interest holders figure out how to resolve the matter. If intrafamily relations are poor, that can take years, during which time the property may deteriorate and accrue an immense tax bill. Making title clear and marketable once again will require that bill to be paid.
Another possible impediment is a boundary dispute. Though deeds and mortgages often lay out the dimensions of the property, the location of the borders must be known to ensure confidence in what is being conveyed. Any question over where they lie therefore causes great apprehension. Like with an unprobated estate, boundary issues may render title unmarketable until assuredness is restored.
Proving “good title” serves the vital goals of confirming the property being conveyed and identifying all interest holders to the world, thus establishing certainty for all involved. From virtually any angle, the title question hangs over the land. To reduce risk, you should not proceed with an endeavor until you are confident that title is good. Your best resource for doing so will be the registry of deeds for the county in which the subject property is located, but you should also check with the courts to ensure the record owner is alive. At D’Ambrosio LLP, we focus on property issues. Please feel free to contact me with any questions.