Consider a title search on a property as a background check – records in the public land registration office are inspected to determine the current state of title to the property and ensure no encumbrances exist that may prevent buyers from taking full possession of the property.
What is title searching?
In a nutshell, then, title searching refers to locating, organizing, and condensing pertinent facts about documents and other related materials registered on title. A typical search involves a lawyer or a title searcher on behalf of a lawyer seeking documents (paper or electronic) about a real estate conveyance. Title information, once gathered and analyzed, tells legal counsel if the owner has good and marketable title.
Why are title searches important?
Title searches are essential because they can uncover encumbrances (or glitches, if you prefer) that may affect the closing of a real estate transaction, such as an easement, a restrictive covenant, an encroachment, a fence dispute, and/or a mortgage that has not been discharged.
An easement is a right enjoyed by one landowner over the land of another, and is granted for a specific purpose. Once granted, the easement attaches to the land and binds subsequent owners. An easement must have a dominant tenement (land that benefits from the easement) and a servient tenement (land that serves or is subject to the easement). Separate ownership of the dominant and servient tenements must exist and the right must confer a benefit on the dominant tenement. The two tenements need not be adjoining.
Easement agreements are usually, but not always, registered against title to both properties. These agreements may be registered as instruments on their own and appear on the title under that particular name, or they may be registered by way of a caveat (a warning or notice on title).
Some easements are created by statutory agreements, which means the easement is created by the authority of a statute or law (e.g., public utilities act). The most common method of creating an easement is by express grant where the servient tenement agrees to grant the privilege.
2. Restrictive Covenant
A restrictive covenant, contained in the deed or title, is a limitation placed on the use of property. For example, the land owner obtaining the promise (the covenantee) acquires the right to restrain the other land owner (the covenantor) from putting land to certain specific uses. Like easements, restrictive covenants are attached to the land and bind subsequent owners.
Some examples of restrictive covenants include:
- use restricted to single-family residence
- parking of commercial vehicles in a driveway
- prohibition of clotheslines
- fence height restrictions
An encroachment is the unauthorized intrusion onto the lands and property of another. The right to an encroachment by one landowner over an adjoining owner’s property is sometimes granted by express written agreement (e.g., a garage that extends slightly over the property). Once the encroachment is no longer present, there is no right to substitute an encroachment except by further agreement.
4. Fence Lines
Similarly, a fence that extends beyond the boundary of the property can be considered an encroachment. Landowners may build fences to mark their property boundaries, but the fence must be constructed on the owner’s property or directly on the property line, not slightly beyond it. Fences are the second most common disputes between landowners and are regulated by municipalities. The Line Fences Act establishes procedures for resolving disputes.
5. Undischarged Mortgage
Mortgages are registered on title using a charge/mortgage of land form. A discharge of charge/mortgage is used when the mortgage has been repaid in full. The form is executed by the mortgagee and provided to the mortgagor. This document is registered at the land registration office as a permanent record of the discharge. Sometimes, however, a mortgagor will pay off the mortgage but fail to register a discharge. This situation may not be discovered until the title search and the sale cannot close until the discharge is registered. Today, electronic registration is used at most Registry offices which requires the use of a lawyer, therefore, this glitch on title searches would be found where mortgages were discharged prior to electronic registration.