Perfect Title

Reviewed by Sujaini | Updated on Aug 27, 2020

What Is Perfect Title?

A perfect title refers to land possession by a deed that is free of any liens or defects. Sometimes, this is called a good, clean, or free and simple title. Great title refers to a condition of possession arising from a liens or other faults unblemished deed. Such a deed gives the holder a direct possession, which a creditor or other claimant cannot contest. The deed is in perfect condition for smooth selling or land transfer.

It is critical that the difference between title and deed is understandable. Title refers to the ownership rights of a particular asset, often an immovable object. Deed refers to the prepared legal contract for a sale or transfer.

The deed contains the property's legal details, such as the exact location and any easements or liens on the property. A title company must thoroughly research the title history of that property while planning to grant a mortgage for purchase of a house. The purpose of this research is to expose any secret defects that would have to appear on the prepared deed.

Common Obstacles to Perfect Title

In the age of electronic record keeping, title search may seem out-dated, but it protects the lender and borrower against legal issues that might occur and could drastically affect a property's value. Some defects that a thorough search can uncover include:

  • Easements are claims by third parties for the use of any portion of a land. It can range from the harmless, such as an out-dated cart track running through a backyard, to a serious issue like easement by the government building a potential road through a property.

  • For a wide variety of reasons, the validity of an earlier act may be questioned. This could have been made by someone who was not of sound mind, a minor involved, or a family relationship was wrongly listed.

  • Previously unknown heirs may come forward to make a claim on the property to a former deed holder.

  • Creditors to a former holder of the deed can hold legitimate claims to recover their debts on the land. Unpaid property tax is one common example of that.

  • Human error in the planning of past deeds is the most common flaw. This can happen in the office of the public registrar, as well as in the clerical work of any lender, appraiser, or title company previously associated with the land.