Real estate transactions involve typical document verification. Buying a home or property is a significant investment, which can be a dream of many. When you are taking a big risk, ensure that the property is free from any legal and financial complications. Before getting into the registration formalities, a thorough title search should be conducted.
According to the Limitation Act, 1963, the time frame of this title search can be valid for 12 to 13 years. While delving into the property transaction, it’s quite necessary to have a complete understanding of the legal landscape.
If you are curious to know more about title search reports, read this comprehensive guide.
What is a Title Search?
A title search report basically refers to the ownership rights over a land or property. It can be determined through many sources, such as court judgements, tax liens, land records and deeds. Normally, this title search report is ordered by businesses or individuals who want to confirm the property’s legal ownership. A clean title indicates that a property is ideal to own. Registration or transaction can be restricted when there is any lien on the property.
Key Components of a Title Search Report
A title search report includes crucial information about the property, such as legal boundaries, ownership, or any other restrictions associated with it.
Chain of Ownership: Verifying the history of ownership clarifies the gaps or inconsistencies possessed with property ownership. If this conclusive proof is not clear, avoid further transactions.
Liens and Encumbrances: Identify any encumbrances or liens that could potentially impact your ability to secure financing (loans from banks or lenders) or your property’s marketability in the future. An outstanding lien clearly means that the property requires loan repayment.
Property Description: An inaccurate property description can be an integral part of title failure. So, it is important to describe the parcel of land accurately to identify exactly where the property is located.
Easements: Easement should be clear for a property or home that you are buying. If easements exist, they grant rights to others to use this property.
Types of Title Search Report
Title search reports can be classified into two types: full search and limited search. Before financing a property purchase, understand that these differences protect you from several fraudulent transactions.
Full Coverage Search
In order to conduct a detailed investigation, a full coverage search can be helpful. It provides a comprehensive review of the property’s history and title for a period of at least 30 years. This examination can be performed when a property is about to be sold, resold, or when construction loans are involved.
It transparently provides details of every aspect of the property, such as easements, legal issues, liens, ownership rights, covenants and restrictions, litigation status, and ownership rights.
Limited Coverage Search
Limited coverage search, on the other hand, is usually performed for simple title guarantee reports, refinance transactions, and short-term leases. Its license is restricted to fifteen years. However, the scope is also limited to encumbrances, disputes, and recent transactional history.
How Title Searches Work
As noted above, a title search report verifies that the property or home has a clean title and checks whether it has any defects like liens. The public record errors associated with the property prevent the transaction between parties.
This title search is conducted by a prospective buyer or a title company who is interested in making an offer on the property. The process is generally initiated by a lender to check whether the property claims any legal issues or judgements. If you have a plan to apply for a loan or other credits, it is essential to verify this title search before approving.
The requesting entity or buyer can conduct research using legal documents or other public records to identify that property is possessed with any liens or judgements.
How Long Does a Title Search Take to Complete?
The process of a title search report can approximately take between 10 and 14 days to complete. The time may extend due to various significant factors such as type of property, property’s age, liens and title issues, transaction history, and availability of documents
Step-by-Step Title Search Process in India
- Collect Original Property Documents
- Obtain original documents from the seller such as sale deeds, mother deed, gift deed, will, partition deed, or previous ownership papers.
- Avoid relying solely on photocopies to avoid fraud or incomplete information.
- Identify the Property Details
- Note exact property identifiers like survey number, CTS number, land parcel number, or plot number.
- Confirm the address and boundaries to match public records.
- Chain of Title Verification
- Trace the chain of ownership going back at least 12-30 years, checking for continuity and completeness of all transfers.
- Verify that all ownership transfers are properly registered without any gaps or irregularities.
- Encumbrance Check (EC)
- Obtain an Encumbrance Certificate from the Sub-Registrar’s office to check for mortgages, liens, loans, or other financial liabilities on the property.
- Validate the encumbrance history for a period typically covering the last 12 to 30 years.
- Review Property Tax and No Due Certificates
- Verify with local municipal authorities that property taxes are fully paid and obtain a No Due Certificate (NDC).
- This helps confirm no outstanding financial liabilities that could affect ownership transfer.
- Verify Land Use and Government Approvals
- Check land classification: agricultural, commercial, residential, industrial, etc.
- For constructed properties, verify building plan approvals, Commencement Certificate, Occupancy Certificate, and environmental clearances with municipal authorities or RERA portals.
- Check for Pending Litigation or Disputes
- Search court records (Civil Courts, High Court, Supreme Court) for any ongoing or past litigation involving the property or owners.
- Investigate disputes such as boundary conflicts, ownership challenges, or unpaid dues.
- Examine Additional Legal Documents
- Review Power of Attorney (PoA) documents if the property is being sold by an agent to ensure validity and registration.
- Check for any release deeds, relinquishment deeds, or builder-buyer agreements and allotment letters if applicable.
- Physical Verification
- Conduct a site visit to verify actual property boundaries and inspect that the property condition and usage aligns with the documents.
- Confirm there are no unauthorized encroachments or changes that conflict with the legal description.
- Compile and Review Title Search Report
- Summarize findings in a detailed report including ownership chain, encumbrances, legal risks, and approvals.
- Highlight any issues or discrepancies requiring resolution before transaction completion.
- Consult with a Legal Expert
- Have a property lawyer or title verification specialist review all documents and findings.
- Resolve any identified issues such as liens, boundary disputes, or document irregularities prior to finalization.
- Obtain Title Insurance (Optional but Recommended)
- Consider purchasing title insurance to protect against future undiscovered title defects or claims.
Title Search Cost and Who Performs It?
The cost of a title search in India typically ranges from ₹3,000 to ₹10,000 depending on the property’s location, complexity, and service provider. It is usually conducted by legal professionals, property consultants, or specialized title search companies to verify ownership, encumbrances, and the legal status of the property. This crucial step safeguards buyers from fraudulent transactions and legal disputes.
Final Wordings
A property value can be easily examined through the title itself. A property with a clear and transparent title has huge value in the market and acts as a proof that you have rights to own or sell the property. So, if you are planning to invest money in real estate, be aware of the marketable title, which determines that it is free from any risks or doubts
Frequently Asked Questions
Can Someone Do a Title Search on Their Own?
Yes, a person can do a title search on their own by accessing local land records and public documents, but legal complexities often require professional expertise. Consulting a property lawyer or title search expert is advisable to ensure thorough verification and avoid missing critical issues.
What is a title search, and why is it important?
A title search verifies the legal ownership of a property and checks for any disputes, liens, or encumbrances. It ensures the buyer acquires a clear and marketable title.
How long should the title history be checked?
Typically, the title history should be checked for at least 12 to 30 years to confirm a continuous chain of ownership and uncover hidden issues.
What documents are needed for title verification?
Key documents include sale deeds, mutation records, encumbrance certificates, and municipal approvals to validate ownership and check liabilities.
Who conducts the title search?
Title searches are performed by property lawyers, title search companies, or specialised consultants who have access to relevant government records.
Apoorva H P Achar