Unlike other types of property, land and real estate is unmovable, cannot be hidden away, and is extraordinarily valuable. That is why most lending parties use it as way to secure a debt. They do this by imposing lien rights against the property, meaning that the creditors, in essence, own a stake in the land and real estate until the debt is paid or resolved.
Because purchasing real estate is such a large investment, you will want to be sure that you own the property outright before you commit to buying. This means you will have clear “title,” or ownership rights. Unlike a deed, a title is not a physical document, but a concept. A title search, however, is a look at the entire ownership chain of the home and property, and it’s an in-depth examination of any possible encumbrances. Basically, it is a written history of the property as it is documented on the official record.
While encumbrances include liens such as those already discussed, they also include tax levies, right-of-ways and easements, and claims of forgotten heirs. That is why a thorough title search is crucial if a home buyer wants to avoid any issues in the future that may taint an otherwise simple sale transaction.
Heirs and Debts of Deceased Owners
If any prior owner of the property passed away, an exhaustive search will determine whether or not he or she left any heirs. If so, it is crucial to learn whether or not he or she left a will and if any succession proceedings are still in progress. It is also critical to be sure that all estate taxes and any creditors’ claims against the estate have been paid.
A mortgage is a lien on real property placed by the bank that has lent money to the buyer to purchase such property. If a mortgage still exists on said property when it is sold to a new buyer, and the now-seller does not pay off the bank, then that mortgage will continue to exist as a lien on the property. That means that if payments are not continuously made by the seller, that the bank can foreclose on the property while the new buyer is living there.
Through a title search, a prospective buyer will learn ahead of time about any unreleased mortgages. Usually, title insurance covers these issues, but many buyers would rather choose to move on to another property.
Real Estate Tax and Local Government Liens
Title searches also reveal whether or not all local taxes are paid in full and up-to-date. Not only can the parish or city assume ownership of your home if you fall behind in tax payments, but often times, the previous owner could have delinquent and this can affect you after you purchase the property.
The state of Louisiana and its parishes and cities also have the right to place liens on real property due to services and other taxes that have not been paid. These include unpaid special assessments taxes for items like streetlight, sewer/water, and road improvements, unpaid inheritance, income, and sales taxes, and unpaid demolition and weed and debris removal costs.
Mechanic Claims and Liens
“Mechanic” is a misnomer here, as it really refers to any contractor – a plumber, electrician, carpenter, or HVAC worker – that has not been compensated for his or her work on a home or building in which he or she provided labor or materials. After 120 days without payment, he or she may file a lien against the home and can legally foreclose against the it to get paid.
Referred to as a “secret lien” because most deadbeat homeowners figure they got away with not paying their workers after 120 days, a meticulous title search will pick up on such a defect in title.
Ongoing Court Matters and Judgments
Real estate title can be affected by ongoing court proceedings, such as foreclosures, estate matters and successions, and lawsuits. Title searches will make the buyer aware of such complications ahead of time. Judgments in such situations can change circumstances regarding the title, as well.
However, that is not the only time a judgment can affect the title to real property. If a previous owner failed to pay certain debts, outside of his or her mortgage, or a contractor, they may have been sued for the balance. If a person does not show up in court, or they do, yet lose the case, a judgment for the amount owed may be entered against them. If the judgment debtor still refuses to pay, an execution sale can take place in which his or her real property can be sold to pay off the judgment. Title searches will locate any judgments against real estate and ensure that they have been paid.
Real Property Easements
Easements are the rights of others to pass on the owner’s real property. As a part of the property’s history, it is expected that subsequent owners will abide by them. Such rights-of-way include those given to utility companies, or to the city or parish, for the greater good of the neighborhood. Other times, neighbors may share trees, shrubbery, or a common driveway.
Federal Tax Liens
The federal government will place liens against real estate to levy and sell said property if the owners’ federal taxes have not been paid. Also, it does not need any court proceedings to take place in order to do so.
Many times, land use can be limited by what are referred to as deed restrictions. For example, a house set on that land may only be permitted to be constructed if it costs a certain amount, or it may be mandated that it only house a single family. Sometimes, if a restriction is violated, there are further instructions, such as the land will be reverted back to the original owner.
Land records in Louisiana are held by the Clerk of the Court in a given parish. This means that the chain of title of any real property will be within his or her records. At Lafayette Process Servers, we know that your time is precious, and you don’t want you to waste your precious time waiting in long lines at the local courthouse cutting through red tape. As such, we now offer a new service where we will gladly conduct your title search at the courthouse for you. Give us a call, text, or drop us an email and learn more about title searching and how we can help you.
This content is to be used for information only, we are not attorneys
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