Navigating the complexities of real estate transactions requires a keen eye for detail and a deep understanding of a property’s history.
Whether you’re a first-time homebuyer, a seasoned real estate investor, or a property professional, understanding the nuances of title searches is crucial for making informed decisions and protecting your investments.
However, that doesn’t necessarily mean you need a full title search in every instance.
While comprehensive title searches that delve deep into a property’s history are often recommended, there are situations where a more focused approach can provide the necessary information without the additional time and expense of a full search.
Sometimes, simply going back to the two most recent owners is all you need to ensure a solid foundation for your investment.
What is a Two Owner Search?
As the name suggests, a two-owner search focuses on the ownership history of a property over the last two owners.
But why do some people opt for a two-owner search over a full title search?
Put simply, a two-owner search is often enough. When past title searches have found no significant issues, a full search might be overkill (although it’s always a good idea to get a full title search if you have any doubts or if the property’s value justifies the extra precaution).
A two-owner search is faster, cheaper, and still provides essential insights to ensure a smooth property transaction.
What Does a Two-Owner Search Include?
- Title Deeds: Establish ownership and transfer of title, including purchase price, date of sale, and names of buyers and sellers.
- Mortgages: Outline the terms of any loans secured by the property, including interest rates, repayment schedules, and security interests.
- Leases: If the property is leased, provide details of the lease agreement, including rent, terms, and restrictions on property use.
- Easements and Restrictions: Indicate any legal rights or limitations affecting the property’s use, such as easements for access or utilities or restrictions on development or appearance.
- Liens: Identify any legal claims against the property, including property taxes, judgments, or mechanics liens.
It also provides vital information about building permits and inspections, insurance policies, covenants, etc.
Why is a Two Owner Search Essential?
A two-owner search is crucial for understanding a property’s recent history and potential risks. By examining all the relevant documents associated with the two most recent owners, you can make an informed decision about whether to proceed with a purchase.
It can also help you avoid costly legal issues down the line.
Crucially, a two-owner search can be more valuable than a current-owner search in some situations since it covers you against more risks.
It provides a broader context for the property’s recent history, potentially uncovering issues that may not be apparent from looking at just the current owner’s tenure.
More specifically, it can help you identify issues that may have been missed in previous searches but could still arise.
Here are some examples:
- Unfinished Projects: For example, a previous owner might have obtained a building permit to install a new septic tank but still needs to complete the work. While the current owner might be unaware of this issue, a two-owner search would reveal the permit and uncover any associated problems, such as groundwater contamination or structural damage caused by the unfinished septic system.
- Hidden Liens: Let’s say a previous owner was involved in a legal dispute that resulted in a judgment being entered against them. This judgment could become a lien on the property, affecting its value and potentially complicating the sale or refinance process. The current owner may not be aware of the lien if they didn’t conduct a thorough title search or if the previous owner failed to disclose the legal issue during the sale, intentionally or unintentionally.
- Easement Disputes: A two-owner search might reveal an easement dispute that began with the previous owner but wasn’t resolved. This could affect your use of the property or lead to legal issues in the future.
- Zoning Violations: If a previous owner made unpermitted changes to the property that violated zoning laws, these might not be apparent from just examining the current owner’s tenure. A two-owner search could uncover these violations, helping you avoid potential fines or mandatory alterations.
- Inheritance Issues: If the property was inherited by the previous owner, there might be complications with the inheritance process that could affect the title. A two-owner search would reveal these potential issues.
- Fraudulent Transfers: In rare cases, a property might have been fraudulently transferred between the previous two owners. While uncommon, such situations can have severe legal implications for future owners.
- Environmental Issues: A two-owner search might reveal environmental assessments or remediation efforts undertaken by the previous owner, providing valuable information about potential contamination or other environmental concerns.
How We Can Help
If a two-owner search is right for you, we can provide the comprehensive information you need to make an informed decision.
Don’t leave your property transaction to chance. Whether you’re buying, selling, or refinancing, understanding the property’s recent history is crucial for protecting your interests and ensuring a smooth transaction.
