In real estate, ‘title’ holds a critical significance and importance in the overall scheme of things. When a buyer is purchasing a property, he or she must be aware of the title of that property, because it holds the inherent information about its lineage and history.

DEFINING THE TITLE

Title of a property is a bundle of rights, which arise from the lawful ownership of the property. In common terms, this means that the title of a property signifies who is the legal owner of that property. It provides information regarding the property’s legal history and lineage. Typically, the title of a property is not limited to a single document, but a set of documents, since any property, anywhere in the world will have an ownership history attached to it.

• There is a distinct difference between title and possession of a property. While title is the legal history of the property, possession of a property may accompany ownership, but it is not sufficient to ‘prove’ ownership. That is where the title comes into the picture, which shows the legal history of the property.
• A title can be acquired by mainly two ways: Either by transfer, such as the sale of a property, or by operation of law, such as inheritance.
• A clear title means that the possessor has an unquestionable claim to the property or asset. If the title is not clear, it might be thought of as a bad title because there could be pending liens against the property; back taxes payable or unsettled building code violations. A title search is thus mandatory to safeguard that there are no liens or issues with the title.

IMPORTANCE OF THE TITLE

• When a buyer is purchasing a property, or a seller is selling a property, then the title of that property transfers, and this is why knowing everything about the title is critical during such a transaction.
• It should be made sure that the title is devoid of any defects, or any legal complications or pending claims with respect to that property.
• The transparency of the title can be ensured by real estate consultants or advocates who specialize in decoding the title of the property.

EXAMPLE – RELEVANCE OF THE TITLE

Let us assume a person is going to buy a piece of land in Bengaluru. The current owner of the property will have a title, and this needs to be examined for the following reasons:

• To find out how this property was acquired by the present owner.
• While issuing the Encumbrance Certificate for the property, title needs to be examined to make sure there is no legal or monetary liability on the property.
• To check if that property is agricultural land or a converted land. In case it’s agricultural land, then it must be converted into non-agricultural land under 95FD Karnataka Land Revenue Act.
• Based on the conversion and determination of the type of land (agriculture, residential, industrial etc.), the layout needs to be approved by the relevant authority.
• Finding out if the property is granted under Scheduled Caste/Scheduled Tribe or not. If it is, then the relevant procedure needs to be followed for transacting that property.

TYPES OF REAL ESTATE TITLES

Real estate ownership, or titles, may take one of several different forms. The most common ones are enlisted below.

• Tenancy in Common

  In this form, two or more individuals jointly hold a real estate title. Independently, they hold a title, for their individual piece of the property. Each individual can transfer or encumber their title. It does not provide equal use or rights.

• Tenants by Entirety

  This title suggests ownership held by a lawfully wedded husband and wife, considering the pair as one individual. If one spouse passes away, the title is transferred to the living spouse. If the couple splits, the two owners by design become tenants in common.

• Joint Tenancy

  Similar to a Tenancy in Common, Joint Tenancy involves two or more individuals holding a real estate title together. It is one of the most common types of ownership. However, herein, both individuals have equivalent rights to the property during their lifetime. If one of the tenants dies, the title passes on to the living tenant.

• Sole Ownership

  Sole Ownership involves a legal individual or entity holding a title. The most prime appeal of sole ownership is that decisions about the property rest with an individual, without involvement of anyone else legally. In this case, making a will is recommended to ensure that the rightful heir gets claim to the property in case of death of the sole owner.

  For various reasons, the title of a property and its type are critical to understand, whenever there is either a sale or purchase of a property, especially for the buyer. By untangling the threads connecting to the title and ownership of a property, a lot of confusion and irregularities can be avoided.