So, have you heard that someone has "Title" to the property? What does that mean?
Well, as a REALTOR®, I deal with Title to properties day in and day out. Yet, I am by far not an expert on it. (Lawyers get paid to know all about it).
What I do know is that its important for homeowners and prospective homeowners to know what Title is and how it affects them. Generally, each residential home, condominium unit, and piece of land has a registered owner on the Title. Lawyers transfer the ownership (or Title) for a property through the Land Titles office when a property is bought and sold.
In Alberta, the Provincial Government oversees Land Titles through the Land Titles office. Each Land Title Certificate has the legal description of the property, the title number, the land location (or ATS reference), and the municipality its in.
Next, is the Registered Owner(s), the date of & cost paid for the property. (Check this over, its important)
Note: this is where it becomes interesting....
The next section is "Encumbrances, Liens, and Interests"
If there is a mortgage on the property, the lender and the original mortgage amount are also found on the document. (If there is no Mortgage and no money is owed, then it known as "Clear Title" I want to be mortgage free and clear title someday!!!!)
You may have heard the term "1st Mortgage" , " 2nd Mortgage" , well that applies to how they are listed, in order, on the Title document. This is because if/when the property is Sold or Foreclosed upon, it goes in order from the 1st to the Last on who gets paid out first. That is normally why, 2nd mortgages charge more for an interest rate because of their lower (less secure) position. Also, you may have heard of a "Reverse Mortgage". This is just using your home as collateral for a loan, and having it registered against the Title for your home. It stays there just like a normal mortgage (unless you pay it back) until you sell your property.
The only difference to this is in the case of property taxes or assessments to the city or municipality. They top everyone, including mortgages. They get first dibs, if the property taxes are not paid.
Also listed here are utility-right-of-ways, Caveats & Liens, restrictive covenants (such as building restrictions for acreages or neighbourhood architectural controls), zoning regulations, and anyone/company that has an interest in the property.
Now, as a Realtor, I pull title when I'm going to possibly list a home for sale so I can be assured that I am talking to the registered owner or owner(s) of the property.
You as a homeowner, might want to check the Title for your home once a year to make sure there is nothing wrong with it. (It costs $5 on the Land Titles website to download a copy of a Title)
Making sure: your information is correct, nobody has put a Lien or Caveat against the title, the mortgage(s) listed are correct, or anything else you don't understand. If you have any questions, contact the Land Titles office or a Lawyer that deals with Real Estate matters.
I hope this Blog post has been helpful. Again, I am not an expert and I just want to give people like you a basic understanding of the Title as it applies to my world, as a Realtor. Please fell free to comment on this or any other Blog post on my website.
Have a great day!
