How to Conduct a Title Search on a Property

Jeremy Diamond
Categories: Legal Needs
January 5, 2021

Each property in Canada belongs to somebody, or something (in the case of company-owned property.) A title search is the history book, so to speak, of a property. It tells you much more than just the identity of the owner.

If you’re looking to purchase a property, conducting a title search is one of the first steps in the process. If you’re concerned about doing a title search on a property as a first-time buyer, don’t be. We’ll take a look at how it’s done and give you as much information as you need to approach the task confidently.

Knowledge is power, and it’s important to know what the title search process is and how it can affect your buying journey.

How Title Searches Work

The process of a title search is typically performed by a real estate law firm or title company on behalf of the buyer, and the lender, if the transaction is financed. It establishes the legal ownership of the property and who holds the title.

Confusingly, the owner doesn’t necessarily hold the title. If a property purchase is financed, the lender holds onto it until they have fully recovered what’s owed. Only then does the title transfer to the owner.

A title search also notes whether there are any outstanding claims or recorded liens against the property. Such claims form a part of the transaction, and the property lawyers will ensure that the claims are paid before the seller receives the balance of the payment.

This information is required for financed deals to ensure the lender is safe from unforeseen expenses.

Title insurance is a valuable resource for homebuyers to possess. Both the homebuyer and the lender have a title insurance policy.

What a Title Search Can Find

A title search helps you discover any problems that could derail a potential acquisition. Here’s a list of the most common issues you could find:

There could be a break in the title chain due to a conveyance by a person that didn’t rightfully own the property. This could mean that the current owner doesn’t have a clear title.
There are creditors, taxes, or a mechanic’s liens on the property.
If the current owner filed for bankruptcy, the ownership could be unclear.
There could be an easement affecting the property’s use.
The town zoning ordinances might forbid your intended use of the property.
The property has more than one mortgage, which the owner has to pay before the sale.
Building code violations.

All the information that a buyer and lender need to make an informed decision regarding the valid exchange of property will be found in a title search.

The Title Search Process

A title search is time-consuming, and you might be surprised to find out how much work is involved. Before we dive in, keep in mind that you can count on Diamond & Diamond to handle the entire process on your behalf.

To perform a title search, one has to view public documents in the county clerk’s offices, the deeds registrar, local courthouse, the recorder’s office and several other offices in Canada.

Each county files property information in either land record books or electronic databases using unique filling systems or mechanisms. It can all seem daunting if you’re a first-time buyer without the proper legal assistance.

For a home, you have to supply the property lot, location, block, and the owner’s data. All this information allows you to search for numerous deeds ensuring that the property was conveyed properly in all transactions. There shouldn’t be any gaps in ownership.

Don’t get stressed about title searches. Contact Diamond & Diamond for guidance.

Special Considerations

Before title companies can issue a clear title to proceed with a real estate transaction, all the above steps must be completed. This ensures that the title isn’t “clouded.” If there are any unresolved issues such as building code violations or inaccurate surveys, a clear title may not be issued.

Title insurance policies protect property owners and lenders against damage or loss arising from liens, defects in the title, impediments, or wrongful ownership that’s discovered during a title search. It’s unlike traditional insurance in the sense that it protects you from past occurrences instead of future potentialities.

Need Help with Your Title Search?

All this information is likely overwhelming but having considerably more knowledge of the process than the average person will help you feel more comfortable to proceed with a home purchase.

Searching for all the necessary documentation is a tedious process and can take weeks or months without expert guidance from a title company. Both buyers and sellers can use a real estate attorney to answer any questions concerning the consequences of disputes or encumbrances on the property. They can also help you transfer the title and get a hold of the physical deed as soon as the property is cleared.

PRO TIP:
“Research about a property before you proceed with the transaction.”