When you buy or sell a home, you should understand the process and the legal requirements which will govern the transaction.  Typically, your contract will require the Sellers to prove that they have good title to the property which can then be transferred to you.  An abstract of title is obtained by the Sellers Attorney and provided to the Buyers Attorney to review to determine if liens or other objections exist, which must then be cured by the Sellers prior to closing.  Here’s an overview of why this information is so important when buying.

What Does the Abstract of Title Contain?

The document contains all of the legal details recorded in the County Clerks Office pertaining to the property. It will cover a minimum period of 60 years and in addition to naming all the owners of the property during that time period, it reveals legal matters that might affect the transaction, such as:

• Liens: Mortgages are the most common liens, but common liens also include liens for unpaid property taxes, income tax liens to both the U.S. and NYS Treasuries, liens for homeowners or condominium associations, and court judgment liens against current and former owners.  Unless these are paid off or released by closing, the Seller will not be able to transfer good title and no bank will agree to allow the property to be mortgaged.  Unless the liens are removed the property would be considered unsaleable.
• Subdivision or homeowners association restrictions: Subdivisions and homeowners associations typically have restrictions which may affect the owners rights.  These restrictions can affect things such as fences, setbacks, ancillary structures and even house paint colors and landscaping.
• Easements: These typically provide for areas for utility infrastructure, and no construction can be performed there. For example, you wouldn’t be able to erect a shed within a utility easement area.  Easements are also used to provide for common driveways whose use is shared by neighboring owners.
• Bankruptcy filings:  When the owner of a property files Bankruptcy, their ownership interest can be transferred to their Court appointed Bankruptcy Trustee.  Unless the property is abandoned or released by the Trustee, the “homeowner will have no legal ability to transfer ownership to a prospective Buyer.

Why Do Home Buyers Need This Document?

Abstracts of title tell the full story about the legal status of a property.  If the abstract does not provide proof that the Seller has good title the Sellers can be offered a period of time to resolve the objections.  If the objections are not resolved, the property will not be eligible for a mortgage and will not be saleable in the future.  It would not be in any Buyers interest to complete the purchase under those circumstances

If you’re searching for a property in the metropolitan area of Rochester, NY, turn to Robert A. Schwartz for assistance. Having served the community since 1982, this lawyer is well-versed in the legal nuances of real estate in Monroe County. He will help you make a safe and strategic purchase. Learn more about his work with real estate law online, or call (585) 334-4270 for a consultation.