You’ve finally found your forever home. It meets all your criteria for now, and for down the line. Before you sign and finalize the offer, make sure you have your lawyer perform what’s known as a title search on the property. Take a look at these 5 top reasons why this step should be done.
- Validate and confirm the existing owners
The main reason for performing a title search is to make sure that the current owners are actually the people selling the property. It will also show you and your lawyer how many times the property has changed owners. This is important because it’s gone through numerous owners in a short amount of time, that could raise red flags for you. This could mean there has been suspicious activity that’s been happening at the property. It will also show you who else, if anyone, is on title to the property. Perhaps some distant cousin that lives in another country. The property can not be sold without all parties being on the agreement. The last thing you want to have happen when you’re in the process of moving in, is to find out someone else is still connected to the cottage and didn’t know it was being sold.
- Confirms the legal descriptions
It may sound unimportant but confirming the actual legal description and the matching PIN associated with the property is an important legal step. Let’s say hypothetically, your realtor made a typo in the original Purchase Agreement and there is now an incorrect number or description of the property that’s gone unnoticed. A simple mistake like this could mean that you actually don’t own that house, you could own the small lot down the road, or nothing, or another property entirely. Asking for a survey of the property is also a great way to see for certain that you’re buying what you want to be buying.
- Special easements associated with the property
Another way to understand easements is the simplified phrase “right of way”. As an example, let’s say your next-door neighbour-to-be ALSO has rights to use the driveway beside your property. They use it to access their property and the main road to get in and out. If the driveway, paved or gravel, is between your two homes, it’s quite normal that they have the rights to use it just like you. It’s not just your private driveway. You’ll want to find this out so you understand you share it with this neighbour.
- Bylaws assigned to the property
Bylaws, such as let’s say the home has historical significance associated to it, would mean certain renovations you want to make aren’t allowed by law. Or, maybe the home is situated in a residential area and does not allow any commercial use – so that means you can’t convert part of the home to your business. Are you allowed to divide the lot into 2? Can you rent out your basement for a second income? You want to find out about any bylaws before you purchase so there’s no surprises down the road.
- Current liens against the home
The formal explanation of the word lien is “a right to keep possession of property belonging to another person until a debt owed by that person is paid.” Having your lawyer search for any liens will show you any and all registered mortgages against the property, as well as who issued it. If an undischarged mortgage is discovered, it will need to be discharged (paid) before you can actually close the deal. Another aspect that could come up is that the Canadian Government has a lien on the property for income tax arrears, or child support or any other type of legal judgement. You will want to know these things before you move forward.
Having a title search performed will give you a complete picture of the history of the house. There’s a lot involved in buying a home and understanding what steps are necessary ultimately protect you and your future investment. At Ares Law, we specialize in real estate law in Parry Sound and the Muskoka region. We can ensure your real estate purchase runs smoothly. If you’re looking to purchase in this area, call us today at (705) 746-6444 and see how we can help.
