Why does title require an affidavid from previous owners?

Question

I am selling a piece of land and title wants an affidavid from a previuos seller dating back 1980. I bought it from someone else this year. Why is this?

Answer 1

There are numerous possibly title defects. This is the #1 reason title companies stress that buyers purchase title insurance, to protect you from future title defects. Just because an attorney reviewed the history of a property does not mean that there are no defects in the title. There is the possibility that things can be missed. You just happened to be the unlucky one. An attorney's opinion is just that his opinion. They are never 100% defective. Always Always purchase title insurance. Title defects can cost owners lots of money or even loss of ownership.

Answer 2

They want a affidavit certifying that there are no other people who have a possessory interest in the property. IF someone does have an interest in the property (if the previous seller was married and the spouse didn't sign the deed, if there's another mortgage, etc.) then that person may come forward after you've transferred possession and attempt to claim ownership. The buyer or you as the seller should hire a lawyer to perform a title search. The lawyer will have insurance that covers you and them in case the title isn't clear. Typically the buyer pays for this, but who has to pay this cost (about $750 where I live) can be negotiated in the purchase and sale contract. If the current buyer is financing the purchase, the bank will require the search be done to protect their investment.

Answer 3

Hi, this is the answer to your question. However, to give you some background, I have given you some information about deeds and conveyances in general. I placed the answer in the next paragraph, so if you don't want to read the following paragraphs, you don't have to, I just thought some background would help.

OK to answer your question directly, the affidavit is due to a Title Standard: a conveyancing reform that the state bar associations have made that are intended to prevent attorneys from raising minor objections to the title's marketability when mechanisms are available to clean up the title otherwise. This is a type of title reform. The filing of an affidavit reciting the facts tending to prove the title with the deed is one of those standards. These standards don't have the force of law. They are guidelines. However, in Nebraska, this has become a statute.

Generally, there are three different types of deeds that can be conveyed by the seller to the buyer in a real estate sale. I will list them in order of quality.
b.)General Warranty Deed: The grantor warrants against to all title defects including those attributable to the grantor’s predecessors. This is the best deed that a buyer could hope for. The GWD contains all six of the following covenants (agreements): The first three are PRESENT COVENANTS, meaning, a present covenant is breached, if ever, AT THE TIME OF DEED’S DELIVERY. Thus, the statute of limitations for breach starts to run from the time of delivery.
PRESENT COVENANTS
a.Covenant of Seisin: Grantor promises that he owns the estate that he now claims to convey.
b.Covenant of Right to Convey: Grantor promises that he has the power to make this conveyance. There aren’t any temporary restraints on grantor’s power to sell.
c.The Covenant Against Encumbrances: Grantor promises that there are no servitudes or mortgages on the land
The next 3 covenants are FUTURE COVENANTS: a future covenant is not breached
if ever until GRANTEE IS DISTURBED IN POSSESSION. Thus, the SOL for breach covenant shall not run until the future date where the GRANTEE IS DISTURBED

FUTURE COVENANTS
d.Covenant for Quiet Enjoyment: Grantor promises that grantee will not be disturbed in possession by third parties’ lawful claim of title.
e.Covenant of Warranty: Grantor promises to defend Grantee if there were any lawful claims of title asserted to others.
f.Covenant for Further Assurances: Grantor promises to perform whatever future acts reasonably necessary to perfect Grantee’s title, if it turns out, that the Grantee’s title is imperfect.

Then there is the special warranty deed. There the seller only warrants that he 1) owns the property; 2) has the right to sell it; 3) and has not HIMSELF placed any encumbrances on the property, meaning that he did not do anything that would enable another person to bring an action against the buyer under a legal claim of right.
If it is later discovered that any of the above representations are untrue, the seller will be liable to make the buyer whole. Either by defending the any action related to the warranties therein, or by taking reasonable steps to fix the problem. However, with this deed, the seller does not promise that the previous owners didn't encumber the property. Thus, the seller will not be liable for any encumbrances that his predecessors caused to be placed upon the property.

The third type of deed is the quit claim deed. Essentially, the seller makes no representations or warranties about the property at all. Although the buyer has the implied duty of conveying marketable title, he will not be liable for any title problems that are discovered on the property. A good way to think of this deed is to imagine the seller saying, "Buyer, I hereby convey to you all of my interests to the property in question, even if I have no interests at all." This puts the Buyer on notice that he must do due diligence (by performing a proper title search of the property) in order to protect his interests.
The courts will assume that the grantee (buyer) has performed such due diligence and that the seller's conveyance of such a deed has affected the bargain, i.e., the buyer got a better deal because the real estate was somehow tainted, but the buyer went through with it anyway because he thought it was worth it.

I am sorry that my explanation was so long, but you have to remember what a title insurance company does. They provide "insurance" to the purchasers of real estate, but the type of insurance is somewhat antithetical to the general meaning of the word. Generally, insurance is regarded to be an insurance company's "bet" that some occurence will not occur. Take life insurance for instance; generally, a life insurance policy is a bet between the insurer and the insured. The insurer (insurance company) bets that you will outlive the term of the contract (the insurance policy), and the the insured (policy holder) is betting that he will die before the term is complete. So if the insured dies within the term, the insured "wins" the policy payout, and it is paid to the policy's named beneficiaries. If the insured lives past the date of the policy's term, the insurer wins and keeps all of the insured's payments having given them nothing in return.

A title insurance policy is different. It is not a bet against future events, it is instead, a bet that past events affecting title are true. More specifically, the title insurer is insuring the purchaser against any claims that his title insurance did not pick up. Such claims to title have to have been made in a public record such as the office of the county clerk. There, the chain of title can be ascertained. The chain of title is the recording of the grantor-grantee transactions that were made on the property, and also any liens on the land. Once these items are of record, the title insurance company (and any other person that buys the property) is on notice of those interests in the land.

Hope this help.

DS, JD

Answer 4

The document you are looking for is called a "vesting deed." In your case, this is the document that evidences the fact that the person from whom YOU bought the property has correctly "deeded" the property to you. In other words, it's the piece of paper that shows that YOUR name is on title (which means that you own the property). In California, title companies are used to perform a check on real property and will prepare a title report showing who owns/has owned the property in the past and at present. If the people from whom you bought the property did NOT record a grant deed vesting title in you, then you do not hold a "possessory interest" or legal title in the property which means that you do not have the right to sell it (since you don't own it).

Answer 5

A title search must be performed to ensure that all prior owners actually had legal title to the property in issue. If the person who sold the property to you did not actually own the property at the time, then you wold have no right to sell...

Answer 6

sounds like the new seller didn't record the deed so they think (and maybe they're right) that the seller is in no position to sell the property to you. They are protecting the old seller against losing his land, which in turn, protecting themselves against an insurance loss.

Answer 7

It's their Insurance against any kind of fraud or other problems to do with legal title.