Whether you are rebuilding your hurricane-damaged home or buying a home, you must establish clear title to the property. In this section, we will discuss how you can get help in doing this from title companies and lawyers.
What Is a Title and Why Should I Care?
The term title refers to your interest in a piece of property, such as land. It can also refer to the document that establishes your ownership. As a property owner, you want to be sure that your title is clear €” that is, no one else claims to be the owner instead of you. The way to establish clear title is to search back through deeds and other public records, often as far back as 60 years, to trace the chain of ownership and show that no one else lays claim to the land. A competing claim can threaten your ownership of the land altogether, or cost you thousands of dollars in legal fees to prove that it's yours.
Caution: Disaster Aid Requires a Clear Title Many disaster recovery programs are only available to the person who has title to the property. That's why this is such an important issue. If the recorded title holder to your home is no longer living, you must establish your own title. Don't panic! There are ways to do this €” see below.
If you live in a home that has been in your family for generations, somewhere along the way you may be missing information about who owned it and when. That makes the title cloudy, because then someone else can say the property is theirs. Some people who thought they owned their property have found that they will need legal help to establish clear title.
Most housing loans use the property as collateral because lenders need a way to get their money back if you stop making mortgage payments. That's why lenders want you to have clear title before they give you a loan ” they want to make sure that you really do own the property that you're using to back up the loan.
Title Companies and Title Attorneys Can Help
Title insurance companies and title attorneys research public records and trace the line of succession (who owned the property and when). You pay a fee for the research and for resolving any problems that are found. If you have a mortgage on the property, the lender will require you to purchase an insurance policy that protects the lender against competing claims. You should also purchase an owners policy so that you are protected as well. You typically pay a separate fee for this title insurance as part of your monthly mortgage payment. If someone shows up later and claims ownership, the title insurance company will defend your claim, pay damages and cover your losses.
Most people use the title insurance company recommended to them by their lender or real-estate professional, but shopping around can save you hundreds of dollars.
Property Surveys Are Part of a Title Search
Lenders or title insurance companies often require a survey to mark the boundaries of the property. A survey is a drawing of the property that shows the boundaries of the property, and marks the location of the house and other structures on the property. You may be able to avoid the cost of a complete survey if you can find the person who last surveyed the property and request an update. Check with your lender or title insurance company to see if an updated survey is acceptable.
If you need legal assistance to establish clear title to your property and canâ€™t afford a lawyer, there are a few different things to try.
Every state has legal aid offices that help people with low incomes deal with legal issues related to housing, wills, divorce and similar issues. Legal aid offices receive public funding, so their services are usually free. Because they serve all low-income people in their area, not just people who were victims of the disaster, legal aid offices are generally busy places, and it can take some time to get an appointment. Still, if you need a lawyer to do a title search, represent you in a legal matter, or to give you legal advice on your unique situation, the legal aid offices are one place to go.
Another way to get free or low-cost legal advice is through pro bono attorneys. These attorneys are in private practice but volunteer their time to give legal counsel to people who otherwise could not afford it. Depending on what you need, these lawyers could represent you in court, give you legal advice, or represent your legal interests in other ways.
To find a pro bono attorney or legal aid offices near you, turn to your state Resource Guide at Route 4 and look under the legal section.