A “clear title” is a title that is free of legal questions and liens as regards the ownership of a residential or commercial property. A requirement for the sale of a property, a clear title may also be called a “good
title,” a “free and clear title” or “one name of title”.
A clear title for a property is one in which all public records regarding the history of the property for sale have been searched by a title professional for any flaws and none have been revealed in that title search. Or, if defects have been revealed, only after the issues have been dealt with is the title is considered clear.
The Title Search
Records such as judgments, liens, tax records, utility assessments, estate documents or levies are some of the documents searched during this process, as is any other information recorded with municipal and county facilities or stored in information data centers called “title plants”.
The object of the search is to find out if any defects or “clouds” exist that encumber the title and that could affect the new buyer’s rights. Defects such as an undiscovered mortgage, an unpaid tax bill, a boundary dispute or an unsatisfied lien must be dealt with before the property can change hands. A clear title is mandatory
to complete the transaction.
Title insurance in the form of Owner Title Insurance is available to protect the rights of buyers after the purchase in the event that some defect that remained undiscovered during the title search crops up later, possibly throwing the clarity of the title into contention. Title insurance provides peace
of mind to the purchaser who will be protected from loss and legal fees from such title defects for as long as they own the property, no matter when the defect is revealed. The title company will even accompany the insured into court if needed for a title challenge Lender Title Insuranc is also available
to protect the investment of the mortgage lender.
For more information about clear titles, visit www.alta.org.