A title search plays a vital role in any home purchase. It ensures the property’s ownership is clear and free from legal disputes. In million-dollar home transactions, a thorough title search is even more important due to the complexity of the legal matters involved.
Understanding what a title search reveals can help you avoid costly issues down the road.
Ownership and chain of title
A title search confirms the current ownership of the property and traces its chain of title, which includes the history of ownership from the current owner back to the original seller. This process ensures that the seller legally owns the property and has the right to sell it. High-end properties often undergo multiple transactions, so confirming the chain of title prevents disputes over ownership.
Liens and encumbrances
A title search also identifies any liens or encumbrances on the property. Liens are claims against a property due to unpaid debts, such as mortgages, taxes, or contractor bills. Connecticut law mandates that all liens be cleared before transferring the property to a new owner. If a lien appears, the buyer must resolve it before closing.
Easements and restrictions
A title search uncovers any easements or property restrictions. Easements allow others to use parts of the property, such as for utilities or access. Restrictions might involve zoning laws, historic preservation rules, or homeowners association (HOA) regulations. These elements can influence future renovations or land use.
Outstanding legal issues
A title search may also reveal pending litigation related to the property. This could include disputes over boundaries, zoning violations, or other legal claims. High-value properties tend to face such issues more frequently due to their complexity. Connecticut law requires full disclosure of any legal issues that could affect the title, and the buyer must resolve them before proceeding with the transaction.
Closing the deal
Once the title search confirms the title is clear and resolves any issues, you can proceed to closing. If the title is clear, you can secure title insurance to protect against future claims. Without this coverage, hidden liens or disputes could jeopardize your rights to the property.
A thorough title search allows you to make informed decisions and avoid unexpected complications.