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What is a Certificate of Title?

What is a Certificate of Title?
What is a Certificate of Title? -Mortgage Rates Today

A Certificate of Title is a legally binding document issued by a state or municipality that identifies the owner(s) of personal or real property. A certificate of title is a document that proves the owner’s right to possession. It usually refers to real land, although it might also refer to a business, a boat, or a car, among other things.

A Certificate of Title is a statement of opinion on the status of a title provided by a title insurance company for real property—such as land or a house—based on a detailed investigation, or title search, of specific public documents. As a result, the title embodies the right or proof of real estate ownership.

Certificate of title explained

Title is an intangible concept in property law that represents a bundle of rights in (to) a piece of property in which a person may hold a legal or equitable interest. The bundle’s rights might be split up and controlled by several parties. It can also refer to a formal document that acts as proof of ownership, such as a deed. In order to transfer ownership of the property to another person, conveyance of the document (transfer of title to the property) may be necessary. Possession, which generally comes with ownership but isn’t always enough to prove it, is not the same as title (for example squatting). Possession and title can often be transferred separately in numerous situations. Land registration and recording serve as public notification of ownership information for real estate.

Certificate of title process

Certificates of title can be used for any sort of property with a title, including real estate and automobiles. Once the owner’s contractual and financial responsibilities have been met, they can take possession of the property.

The certificate of title contains the owner’s name as well as information about the property. When a piece of real estate is sold, the title is passed on to the new owner.

Difference between a certificate of title and a deed?

A deed and a certificate of title are both written papers that serve as proof of ownership. However, there are some fundamental differences between the two.

The deed is a document used when property is transferred from a seller to a buyer. While the certificate of title is an opinion of status and does not guarantee ownership, it is a document used when property is transferred from a seller to a buyer. The seller transfers the interest to the buyer, generally known as the grantor, by issuing a deed. The deed may also provide specific details regarding the property.

Pointers to remember for Certificate of title

A certificate of title does not imply that the title is free and clear. Unrecorded encumbrances and liens, inaccurately documented information, or fraudulent activities are all possibilities.

For these reasons, title insurance is obtained to protect the seller from any claims emerging from unrecorded or fraudulent activities that occurred in the past. Lenders that require certificates of title before authorizing mortgage loans can get these from title firms. 

If you have any other questions regarding Certificate of Titles, contact the mortgage experts at Mortgage Rates Today!