“…There nothing more expensive than a bad lawyer”.
-Mike Gowen

Christopher S. Mulvaney,

Attorney and Counselor-at-Law

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THIS WEBSITE INCLUDES GENERAL INFORMATION & THE OPINIONS OF CHRISTOPHER S. MULVANEY. IT IS INTENDED TO STIMULATE A BASIS FOR QUESTIONS RELATED TO YOUR PARTICULAR FACTUAL CIRCUMSTANCES — BEFORE YOU ACT.  THIS WEBSITE DOES NOT CONSTITUTE LEGAL ADVICE. IF YOU WANT LEGAL ADVICE, PLEASE MAKE A ZOOM APPOINTMENT TO SPEAK WITH ME.

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Gonzaga University School of Law – Spokane, Washington – Class of 2002 – Cum Laude The Latin phrase “Deo patriae, scientiis, artibus” translates to “For God and country through sciences and arts”.  The initials A.M.D.G. on the seal of Gonzaga Law School stand for Ad Majorem Dei Gloriam, which is Latin for “For the Greater Glory of God” the Motto of the Society of Jesus (Jesuits): a Catholic religious order founded by St. Ignatius of Loyola.

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WHY IS IT IMPORTANT TO HAVE CLEAR TITLE TO REAL ESTATE AND WHAT DOES CLEAR TITLE MEAN?

In real estate, having a clear title is crucial for several reasons, ensuring a smooth and secure transaction for all parties involved, especially the buyer. 

What does “clear title” mean?

A clear title, also known as a “clean title,” means that the property’s title is free from any liens, disputes, or legal questions about the ownership. It signifies that the seller has the full legal right to transfer ownership to the buyer without any encumbrances or legal obstacles.  

 

 

 

 

 

 

 

Why is it important to have clear title?

• Secure Ownership: It guarantees that the buyer will be the rightful owner of the property, free from any claims or disputes by others. This protects the buyer’s investment and provides peace of mind.
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• Prevent Future Legal Disputes: A clear title helps avoid potential legal challenges and disputes from previous owners, heirs, or creditors.
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• Facilitates Financing: Lenders typically require a clear title before approving a mortgage, as it ensures their investment is protected. If a title is unclear, financing may be delayed or refused.
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• Protects Investment Value: A clear title enhances the property’s value and marketability, making it more attractive to potential buyers. If issues are later discovered, it can significantly affect the property’s value and make it difficult to sell in the future.
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• Avoids Financial Liabilities: A clear title ensures that the buyer does not inherit any outstanding financial obligations tied to the property, such as unpaid taxes or liens.
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• Minimizes Transaction Delays: Resolving any title issues upfront helps avoid delays in the transaction process and ensures a smooth closing. 

How to check for clear title:

• Title Search: A title company or real estate attorney conducts a title search, which involves reviewing public records to investigate the property’s history and uncover any potential issues.
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• Title Insurance: Buyers should consider purchasing title insurance, which protects them from potential losses or legal challenges related to title issues that may arise in the future.  

In essence, having a clear title is crucial for a smooth and secure real estate transaction, safeguarding the buyer’s investment and ensuring their peace of mind. 

WHAT IS TITLE INSURANCE AND HOW DOES IT WORK?

Title insurance is a unique form of insurance that protects real estate owners and lenders from financial loss due to problems with the title to the property. It is different from other types of insurance like homeowners insurance because it focuses on risks that existed in the past, before the property was even purchased. 

Here’s how it works:

1. Title Search and Examination:
   • Before issuing a policy, a title company performs a thorough title search.
   • This involves examining public records, such as deeds, mortgages, liens, judgments, and other legal documents, to identify any potential issues or “defects” with the title.
   • The goal is to discover any liens, encumbrances, or other legal challenges that could affect the buyer’s ownership of the property.
2. Addressing Found Issues:
   • If any issues are discovered during the title search, the title company works to resolve them before the closing.
   • This can involve clearing liens, correcting errors in public records, or addressing other matters that could cloud the title.
3. Issuing the Title Insurance Policy:
   • Once the title is deemed “clear,” the title company issues the title insurance policy.
   • The buyer typically pays a one-time premium at closing.
   • This premium covers the cost of the title search, examination, and the policy itself.
4. Protecting against Future Claims:
   • Title insurance protects against hidden title defects that may not have been discovered during the title search.
   • If a claim arises in the future, such as a missed lien, a boundary dispute, or a claim from a missing heir, the title insurance policy will cover the cost of legal expenses and any financial losses up to the policy amount.
   • The title insurer will handle the legal defense and work to resolve the title issue on behalf of the insured party. 

Types of Title Insurance Policies:

• Owner’s Title Insurance:
  • Protects the buyer’s investment in the property.
  • Typically issued for the purchase price of the home and remains in effect as long as the buyer owns the property.
  • This policy covers the homeowner’s financial loss if a covered title issue arises after the purchase.
• Lender’s Title Insurance:
  • Protects the lender’s investment in the property.
  • Lenders usually require buyers to purchase this policy as a condition of the mortgage loan.
  • The policy amount is typically equal to the loan amount and decreases as the loan is paid off. 

In summary, title insurance is a crucial form of protection for real estate buyers and lenders. It helps to ensure a clear title, prevents future legal disputes, and provides financial protection in case of unexpected title issues. 

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Washington State residents can meet with me in Zoom/DocuSign from anywhere in the world, and I can notarize their electronic signatures because I am a remote online notary.  Just email me an image of your photo ID.