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Titles: Clear titles and what it means to have one that isn't

When you're asked for a title in real estate, it's referring to who has the legal right and ownership of a property. You probably already have heard about titles for cars; they're released once the vehicle is paid off. The same is true for real estate.

When you buy a home and pay it off, you may not have a clear title. There are a few reasons for this. First, someone may have a lien on the property. For instance, if a lien was placed to secure a debt, then the lien has to be paid before the land can be sold to someone else.

Second, covenants of record may be in the way. These records are promises made to someone else. For instance, if the owner of the property promised his neighbor that he could always have a place to park on his property, then that will be in the deed of the property and can't be removed by the new owner unless a new deal is struck.

Past ownership claims can also make your title more complicated. If the land has been in the same family for a long period of time, it can be hard to know who the original owner was. Or, if someone took the land through a process known as adverse possession, there would likely never have been a grant to use the property to begin with. In that case, it would be easier for someone from the property's past to come back and claim what was once theirs, leaving you with a title dispute.

Source: FindLaw, "What Does Title Mean?," accessed April 01, 2016

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