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Passage of Title

One of the most important legal steps of buying a house is the Passage of Title, and for the same reason, it also tends to cause the most trouble. Here are some key facts to know about the passage of title on your own property.

What is Passage of Title?

The passage of title, in simple terms, is the transfer of the legal rights over real property (real estate) from one person to another. When buying or selling a home, passage of title can be accomplished with the help of your real estate lawyer, and it is the last formality that determines who actually owns the property, complete with all the privileges and responsibilities of ownership.

Why Passage of Title important

The passage of title is important because it makes the sale of your property legal. Without possession of legal title over your property, the law will not recognize you as the owner of your own property.

Passage of title is also important because in order to successfully complete a passage, or transfer, of title, the title must be "clear". A clear title means that there are no legal errors in the history of title, no mistakes in recording, and no other parties who have interests in the property, such as a bank who is owed a property-related debt, an ex-spouse, an heir by will, tax officials, or other lien-holders, to name a few.

How to prevent Title issues

As scary as the title issue may seem, there are some steps you can take in order to help this process and avoid problems having to do with the title to your property.

  • The first is to enlist the help of an experienced real estate lawyer. With your lawyer, you'll be able to look through the history of the property, when and how the house was built, the methods by which the title was passed, and the details of any instances where previous transaction lawyers might have been negligent.

  • The second is to buy title insurance. In most real estate transactions, where there is a mortgage lender involved, the bank will require a policy of title insurance to protect their loan (the "Loan Policy"). This is especially reassuring because title insurance from a Title Insurance agency will cover you against risks like incompetent representation, erroneous description of the property, fraud and many others. While this type of insurance could be expensive, it is a one time investment that could have great returns if you have reason to be worried.

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