Liens may arise from unpaid state, federal or county taxes, unpaid Deeds of Trust (Mortgages), Judgments and Mechanics’ Liens for example. Additionally, the Deeds of record may not meet the state requirements for a valid conveyance, all heirs to an estate may not have executed the Deed and the property description may be insufficient. Such are only a few of the problems which may arise.

Before an attorney begins the actual title examination, it is helpful to gather as much information as possible about the property being examined. The most important information an attorney needs is the property location and the name of the owner. Once this information is gathered, the attorney may begin the actual title search at the courthouse. 

Title examinations usually begin in the Tax Office. Here, the attorney can verify the information already obtained. The attorney will be able to determine who owns the property; in what name the property is listed; where the property is located; obtain a copy of the tax map; verify if the taxes have been paid and the valuation of the subject property. 

Obtaining the chain of title is the next step.  To "run a chain of title" the attorney creates in reverse chronological order the names of all the persons who have owned the land for a specific number of years. When running a chain of title, the attorney will examine any "out of conveyances" and will have to look at those to determine ownership and uncover flaws. 

After the attorney has determined the chain of title, he should note all exceptions pertaining to the subject property such as mortgage liens, restrictions, easements and rights of way. Once the chain of title and out conveyances are reviewed, the attorney must search various other public records such as UCC Financing Statements, Special Proceedings, Civil Actions and Judgments. After all the information is gathered, a Preliminary Opinion on title is prepared and the clients are informed of all the findings.

The Purchaser and Lender can then determine if the title is marketable. Based on the information gathered, either party may back out of the contract should the title fail the marketability test. No one wants to pay for property which he may never own. Hence, care should be given in selecting a closing attorney and always, always obtain a title examination. You will not know what you are buying without it.

The information provided above is general in nature and not intended to be inclusive of all matters and problems. More specifically, the author is a North Carolina attorney and the comments mentioned herein are specific to that state. Each person is encouraged to consult his own attorney and not rely on the information found on this website.

T. Bentley Leonard, Attorney at Law

274 Merrimon Avenue

Asheville, NC 28801

(828) 255-0456