Detroit Real Estate

What are clouds on a title and why should you care? 

When there are clouds on a title they mean defects in the title.  Some examples of defects in title are:  

• Other Ownership Claims: Other parties who might have an ownership interest in the property (usually one of the most common ways this happens is when the property isn't probated correctly when somebody dies, or transferred correctly  
• Mechanic´s Liens: Claims for payment filed when the seller didn't fully pay a contractor´s bill
• County/State/Federal Liens: For unpaid property taxes or unpaid income taxes  (usually federal it is unpaid employee payroll taxes) 
• Pending Legal Action or Judgments:  In legal jargon they call this lis pendens.  The suing party usually files a lis pendens to notify potential buyers, or mortgagors that there may be legal action coming.  
• Restrictive Covenants: Legal limitations on aspects of the property´s use, such as size, type or style of buildings allowed to be added to property  lTitle Insurance and why buy it?  
• Zoning Ordinances
• Easements: The right to use another´s property for a specific purpose

A defect or cloud means you don't own the house totally by yourself.  Somebody else has an interest in the property when there is a defect.  So yes you should always get title insurance when you buy a home.  And you should never buy a home without going through a title company.  Otherwise you could buy a house that somebody else has a lien on it, somebody else may have an interest in.  Another words buying a home without a title company could mean you don't own the whole house free and clear.

Wouldn't you hate to find out in order to sell your home you have to pay a contractor $25,000 from the previous owner's debts?  Get title insurance if possible. 

That is why you need to have Title insurance protects the policy holder from disputes over the ownership of a property.  Title insurance is basically an insurance policy that you pay for in one lump sum to protect you from defects in title. 

The way the process works in Michigan is.  A title company goes to the county in which the property is located.  So if the property is in Wayne County Michigan they go down to the County building in Detroit.  They go to the records section where the mortgages and all public records for a property is recorded.  They go thru the file.

Then the title company looks for leins, judgements, mortgages.  They look to make sure the chain of title has no gaps.  Sometimes it is a simple as person not filing a death certificate or a quit claim deed.  The title company sends a list of items needed to clear the title to the mortgage company, or real estate agent.  The list of items need to be fulfilled prior to closing to provide clear title.  It may as simple as showing proof that the contractor was paid, or that an old mortgage was paid off. 

So the bottom line is that you don't want a cloud on your title of your home.  And the best way to prevent cloud/ defects on the  title is to have title insurance.

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Northville Mi Trivia

 Northville's earliest known baseball game occurred on Monday, August 30, 1869, between the home town 'Eclipse' and the 'Lone Star' team of Plymouth. The match persisted for three hours-forty-five minutes and when nine full innings were finally completed, the Eclipse had out-tallied their neighboring opponents, 53-36.