What is a Title Search?
An examination of a real estate title can be compared to a structural inspection of your prospective home. It is an examination to determine essentially if there is anything wrong with the ownership of the property or if there are any limitations of which you should be aware.
In Maine, the title examiner is required to search the public records (the history of the property) for a minimum of forty years or until the examiner can "rest" on a warranty deed, whichever is later. This "resting deed" becomes the starting point for the title search. It may be one hundred or more years in the past! From that point to the present, the examiner is required to review every single transaction (document) which might effect your property. There could be probate estates involved, subdivisions of the property over time, the grant of easements or other rights of usage, tax liens, mechanics liens, divisions resulting from divorces, foreclosure actions, condemnation proceedings, and a multitude of other transactions which the examiner must review and approve.
The end result is an opinion that the title is sound. In other words, the seller really does own the property. However, the property might be subject to certain encumbrances such as an existing mortgage which must be "discharged" (paid-off) for the seller to convey clear title to the buyer.[Back to Top]
What is Title Insurance?
Returning to our structural inspection analogy, a title opinion is just that, an opinion. It is the result of an inspection of the title. The examiner cannot guarantee there are no title problems any more than the home inspector can say for certain that there is not a structural defect in the building. Each professional renders an opinion based upon observable facts and field experience. But that does not mean that there cannot be undetectable flaws. Because there is an element of uncertainty, there is risk. Title insurance addresses that risk and is designed to compensate home buyers for actual losses resulting from title defects.
Lenders are aware of the complexity of land titles and the risk involved. They require the purchase of lender's title insurance.
The buyer is not required to purchase protection. However, buyer's insurance is available at costs representing a small fraction of the value of the property. This one-time charge provides protection for as long as the buyer owns the property.
Check out this great video explaining the title process and title insurance:
Common Ways to Hold Title
The two most common ways two or more persons may hold title to real estate are:
Tenants in Common
What Happens Upon Death
1. When title is held as Tenants in Common, it is necessary to probate the estate of the deceased before the real estate may be sold or mortgaged. There is no right of survivorship.
2. When the title is held as Joint Tenants, the title automatically succeeds to the surviving title holder or title holders without the necessity to probate the estate of the deceased before the real estate may be sold or mortgaged.
3. In any case of death of an owner of real estate, whether Tenants in Common or Joint Tenants, it is necessary to procure a release of the estate tax or taxes which automatically, by statute, become a lien on the property.
Who has Control and Management?
Regardless of how title is held, control, management and possession of the property is in the owners equally unless there is an agreement to the contrary. However, each individual owner can divest themselves of their individual share in the property without the consent of the others.