How To Verify Ownership Of A Property ; A Comprehensive Guide

How To Verify Ownership Of A Property ; A Comprehensive Guide

Verifying property ownership is an essential step when buying or selling real estate. It helps ensure the seller has the legal right to sell the property and protects the buyer from potential title issues down the road.

This process requires researching property records, examining legal documents, and conducting due diligence.

Property Ownership Verification: A Comprehensive Guide

Property ownership verification is a crucial step in any real estate transaction. It involves a series of steps to ensure the legitimacy of the property’s title, the authenticity of the seller, and the absence of any encumbrances or claims on the property.

This article provides a more detailed look at each step involved in the property ownership verification process.

Checking Government Records

Every piece of land or property is usually recorded in government books, specifically in the local land or property registrar’s office. These records are usually public and can be accessed to verify the ownership details. You can verify a property’s owner by checking the public tax records

Verifying the Title Deed

The title deed is a crucial document that provides evidence of ownership. It should contain the full name of the owner, the date of acquisition, the property’s size, and other crucial details.

Problems can arise when there are mistakes in the property’s deed, the legal document that spells out the details of ownership and specifics about the property. If there is a clerical error or missing information in the deed, it will need to be fixed, and the deed re-filed, before closing can take place.

Property Tax Receipts and Bills

Verify that all property taxes and utility bills have been paid up to date. Any outstanding payments can affect the transaction.

Verifying the Encumbrance Certificate

An encumbrance certificate contains details of any mortgages, loans, or legal issues against the property. It can be obtained from the local sub-registrar office where the property is registered.

Checking for Mortgage Details

If the property has a mortgage, ensure that the mortgage will be cleared before or at the time of the property transaction. Ask for a mortgage release or satisfaction letter from the lender

Inspecting the Property Physically

Physically inspect the property to ensure that its details match those listed in the documents. Note any discrepancies, as these may indicate fraudulent documents

Comparing Document Details with Online Listings

Compare the details mentioned in the documents with those available on online property listing sites, if any

Conducting an Official Search at the Land Registry

This search aims to verify the ownership of the property and uncover any encumbrances or claims on the land. The search results will include information such as the registered owner of the land, any existing charges or caveats, and the size and status of the property

Verifying the Authenticity of the Seller’s Identity Documents

A search at the Registry of Persons can provide assurance that the person claiming to be the owner of the land is indeed the registered owner

Reviewing All Legal Documentation Related to the Land

This includes the title deed, survey plans, and any other relevant documents

Hiring a Property Lawyer

A property lawyer can verify the legal status of the property documents and ensure that the property has a clear and marketable title.

Importance of Due Diligence in Property Transactions

Due diligence is a detailed analysis or investigation conducted by buyers or investors before making a property purchase decision. It involves examining various aspects, such as legal documentation, financial records, property condition, market analysis, and potential risks associated with the transaction.

The importance of comprehensive due diligence in real estate is undeniable. It provides an understanding of the potential risks and rewards

Common Issues in Property Ownership Verification

Common issues in property ownership verification include public record errors, liens, unclear boundaries, illegal deeds, forgery, and fraud.

Other issues include problems with boundary lines, bankruptcies, an uncovered will, forged documents, liens or debts on the property, and clerical, government, or public records errors.

What Are The Consequences Of Not Verifying Property Ownership Before Purchasing?

Not verifying property ownership before purchasing can lead to several serious consequences:

1. Disputes Over Ownership: If a property is transferred without proper title verification, disputes over ownership may arise. Documentation errors, missing heirs, or impersonation of real owners may result in the entire transaction being declared void. Consequently, the buyer may lose rights to the property
2. Hidden Debts and Liens: A title search might reveal hidden debts attached to the property or a lien that could affect the transaction. If these issues are not identified before the purchase, the buyer might be responsible for settling these debts, which could lead to financial loss
3. Legal Issues: If the title is not clear, the buyer might face legal issues in the future. For instance, debts of any of the previous owners, such as mortgage liens, can come back to haunt the new owner. Additionally, easements and restrictive covenants follow the property, not the owner, which could affect the buyer’s rights to the property.
4. Risk of Loss: The lack of a simple document, considered unnecessary at the time of purchase, can lead to the loss of the property later on. This is especially true when buying a property directly from the owner without the guidance of a qualified realtor.
5. Potential Lawsuits: If the seller fails to disclose negative information about the property, they could face a lawsuit. On the other hand, the buyer could end up purchasing a property with undisclosed issues, leading to unexpected repair costs or other problems.
6. Breach of Contract: If the seller backs out of a purchase contract, they can be sued for breach of contract. A judge could order the seller to sign over a deed and complete the sale anyway. This could lead to financial and legal complications for both parties.