We have explained in our previous blogs, what the title deed – which is essential for the sale and purchase of real estate – is for and what information it contains. It was also mentioned that this document shows all factors that can affect the sale. If there is a ” encumbrance” or “right” on the title deed, it can affect the length of the procedure, the loan and many other details.
All details related to encumbrances are in the third part of the title deed including when that particular encumbrance was placed on the property. The most common encumbrance that we usually encounter is the bank loan, which is listed as a separate mortgage and the bank is the holder of that mortgage. This is also coupled with a restraint on alienation and encumbrance. Therefore, until the property in question is not free of encumbrances, ownership cannot be transferred.
There may also be a foreclosure on the property – this happens if the mortgage has already been cancelled in the event of an existing debt. This makes the procedure a bit more complicated, because if there is also a debt to the executor you will definitely need a lawyer. If the purchase – price can cover the debt, then the situation is easier and you should know this before signing the contract of sale.
In case of multiple owners, we know exactly who the mortgage/foreclosure/other encumbrance belongs to, as there is a reference on the title deed in this regard.
You might be familiar with the beneficiary user right as well. It often occurs when parents transfer the property over to their children, but they wish to dispose of it until the inheritance takes place. No one wants to buy a property with a kind beneficiary, so it is important to make sure that the beneficiary is willing to waive this right at the time of sale. The beneficiary interest cannot be inherited but a simple formula can be used to calculate its value. Its value depends on the age of the beneficiary.
A less “famous” right is the right of way. It is used by utility providers to ensure that they always have access to their unit on the property. Similar to this is the right of mining easement, which can be seen on the title deed if, for example, a cable runs under your house.
The right of way is most often encountered in the case of private properties, when we can approach a property on a road only that belongs to a private person. In such cases, the easement indicates that the neighboring property owners can enter to their property transiting this road (even if it’s a private).
The dower often remains on the title deed even if the widow has already been paid. The cancellation order must be presented at the land registry during the probate process.
In the event that someone inherits a property and then wishes to sell it, it is always necessary to wait until the probate process is completed and the heir is not only listed on the title deed as a legal owner but also as a registered owner. This can take up to even half of a year. There is the possibility of a preliminary contract, where the parties lay down the terms under which they will enter into a final sale and purchase contract at the end of the probate proceedings.
If the owner is a minor, the court of guardians must be involved in the process; this will be the responsibility of the lawyer. In this case, the purchase price can be spent again under the supervision of the guardian. The whole procedure can take few months.
These were the most common topics regarding the title deed of the property. In the next section, we will talk about the importance of the copy of a map.