What is a Title Examination/Opinion?

Hohenheim Legal specializes in real estate title examination; however, it is one of the most mysterious areas of the real estate purchase/sell process. Before every purchase, a title attorney completes a title search on the subject property. The examining attorney reviews an abstract, or a compiled collection, of instruments & documents affecting the subject property. There are two main purposes of a title examination: (1) it proves that the seller owns the property and (2) it shows any potential issues with that ownership. At the most basic level, a title opinion often has a few main parts: (1) instruments examined, (2) the requirements, and (3) the exceptions.

(1) Instruments Examined

While this is often called many different things, it all comes down to one simple thing: what documents did the attorney review to provide this opinion? This will include the various abstracts, any prior title insurance policies or title opinions, and various other external sources (taxes, documents provided to the examiner, etc.). This section is incredibly important as it provides the window in which the attorney conducted the review. If documents fall outside of this window, they will not be included in the subsequent title insurance. Therefore, if you know a document has been filed outside of this window, you need to provide that to the examiner. Otherwise, any issues arising therefrom would not be covered and you could be out of luck. A common example of such documents are the “dresser-drawer” deeds where an individual executes a deed but does not file it. This was a common occurrence before transfer-on-death deeds were allowed in Oklahoma.

(2) The Requirements

This is the most important part of a title examination and opinions. The requirements state that the title, or ownership, of the property is marketable (or able to be sold) subject to the completion of the following issues. The opinion will then note the legal issues with ownership including Ad Valoreum taxes (if owed), probates, quiet titles, bail bonds, etc. etc etc. There are so many potential issues that it would be a full article to list all the possibilities. The requirements portion of the opinion also give you an idea of how hard it will be to clear title. Of the most common title issues, the longest delays are probate or quiet title issues which will generally delay closing for 3+ months.

(3) The Exceptions

Exceptions are items that are not covered by the opinion. For our surface title opinions, this includes all water and oil/gas/minerals concerning the subject property. However, easements and rights-of-way are also listed in this area. Other common exceptions in Oklahoma include Airport/Conservancy districts. Hohenheim always suggests buyers review the exceptions as it shows the encumbrances, easements, rights-of-way, and HOA covenants (if any).

CONCLUSION

Once an abstract is received by a title attorney, a title opinion can be completed in a couple of hours (depending on the complexity). If you are selling or buying real estate, keep in mind that a title search will need to be completed. Hohenheim Legal will be happy to complete that title search for you. Give us a call or email at the contact information below to get started on buying or selling a property.