Over the past few weeks, we’ve featured a number of articles about clearing title concepts. The discussion has been quite lively (particularly on our Facebook page and during live Zoom chats!), but a few people have had questions about some of the terminology when it comes to clearing titles, so today we’re sharing a quick glossary.
Clearing Title Glossary: Understanding The Language
A Clear Title
A clear title is a property title that has no liens or levies on it or any other type of questionable content that may cause ambiguity over who actually legally owns the property.
For example, a home with a clear title is a home that most definitely belongs to one individual and there is no reason that their ownership should be or could be disputed. This means that the homeowner is free to sell that home should they choose to do so.
The opposite of a clear title is a “dirty title” or a title that has another claim to ownership, for example, if a lien is placed on a home because of debts owed, that lien means that the home no longer exclusively belongs to the homeowner. When a title is not clear, it means that the homeowner may not sell the home without consulting the lien holder.
Title ownership can also be in question when there are problems with the home itself, for example, if there is a building code violation that has not been addressed. In this instance, the property owner would not be able to sell that home until the issue had been taken care of.
Title Search
A title search is exactly what it sounds like! It’s a search of the title of a property to check to see whether the title is clean or dirty. You should ALWAYS perform a title search before even considering a particular piece of property.
Affidavit
An affidavit is a written statement that has been confirmed by an oath. Affidavits are often used in courts when cases arise over property ownership.
Lien
A lien is a LEGAL claim to a piece of property that guarantees the individual to whom the lien is granted a specific amount of money upon the sale of that property. Liens are most often the result of owing a significant amount of money to creditors or using the property as collateral in a situation where you default from the contract made.
A Government Superior Lien
A government superior lien refers to when (under very particular circumstances) the IRS can redeem a property IF they do so within the one year redemption period from the deed recording.
Deed of Trust
A deed of trust is what we call it when a borrower transfers the legal title of property over to a trustee. The trustee then holds the title as security for a debt. It’s important to note here, though, that the equitable title remains with the owner of the property.
Warranty Deed
A warranty deed is when the seller of a property makes a guarantee that they hold a clear title to the property in question and that they have the right to sell that property to the buyer in question.
There are two types of warranty deed – a general warranty deed and a special warranty deed.
A general warranty deed is designed to protect the buyer of the property against any defects in the property that may have come up at any point all the way back to the first days of that property’s existence.
A special warranty deed is designed to protect the buyer of the property only against title defects that came about as a result of actions or omissions by the property’s owner/seller. This means that the seller of the property is responsible only for defects that came about during the time that they owned the property.
Release
A release is what we call it when a lien or mortgage has been completely repaid and the lender who had the lien on the property releases that lien.
Title Insurance
Title insurance is insurance that protects a buyer of a property against challenges of the title from the former owner of the property, mortgage companies, or even the IRS.
Blight
You’ll often hear of uninhabited properties becoming a blight on communities, but what exactly does blight mean? As a noun, blight is something that spoils something else. For example, abandoned homes are a blight to the neighborhood because they detract from property values and the overall appeal of the community. Property is usually considered a blight when it is dilapidated, unsafe, or in unsightly condition.
Blight can also be used as a verb in which case we are talking about the act of being detrimental. So, in the example above you might say “the neighborhood is being blighted by the number of abandoned properties in the community.
Interested in Learning More about Title Clearing?
If you’re interested in learning more about title clearing we encourage you to look back over some of the more recent articles we’ve shared here on the Weidner Law Blog. We also encourage you to drop by the Weidner Law Facebook page to take part in our live chats!
