nilesh mehta (taxation professional) 21 October 2008

search/investigation of title

Under what sections of which act the search is made for investigating the title in a property. Enumerate details about the procedure of issuing the title certificate. regards.

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6 Replies

N.K.Assumi (Advocate) 22 October 2008

Dear Nilesh, your query is about escrow report. The word Escrow means a procedure whereby a disinterested third party mostly an advocate who handles legal documents and funds on behalf of a seller and buyer and delivers them upon performance by the parties.The job of searching the public records and identify existing rights and interest is not an easy task. This procedure is very important for Banking and Insurance company besides individual party in any transactions as no banker or insurance would like to invest in uncertain title to the property.

A title is composed of three basics elements. 1. Rights and interests that are disclosed in the public records or by physical inspection of the property eg deeds,mortgages,leasses etc, parties in possession,utility,easements etc.

2. Rights and interest that are recorded but exist eg limitation that is imposed by laws and statues etc.

3. Rights and interests that are hidden eg forgeries,secret marriages and unknown heirs.

Thus from the above you can see that the the task of Escrow is not that easy as the Escrow must have the requisite knowledge of the laws and customs involved in each of the documents that create the rights, and the departments which keeps the records of all thoae documents. The Escrow mostly proceeds with examination of title, inspection of title deeds, Inspection of registration departments, enquiry as to possession,Inspection of public records, formation of intention etc and prepare his title report in chronological manner.

Each title can be composed to sticks in a bundle.The rights and interest are represented by the sticks.The owners own what we call a fee simple title, that is, they have purchased the most vital and valuable sticks including the rights of possession, use,occupancy,enjoyment,inheritance etc.Also, within that bundle are sticks that may be owned by other parties. these are called encumbrances and may consists of easement,mortgages,liens etc.

Let me cite with buyers and sellers. When a persons purchases a parcel of real estate, it is not only the physical property itself that he or she acquires,but the sellers rights and interest "the sellers title" in the property. it is essential for the prospective purchaser to know before the transaction takes place,precisely what the rights or interest the seller can convey. The purchaser also needs to know who else may have rights or interest in the property, and about any encumbrances against the property that may affect the use or enjoyment of the land etc.The title search must cover all these rights and interest. This applies with mortgages etc. Thus title investigation report is very important for bankers, insurance company etc.

prabodh kumar patel (advocate) 22 October 2008

Yes it is really a tough job as i am very much acquinted with it coz my senior is panel lawyer for SBI, IOB & UGB.

prabodh kumar patel (advocate) 22 October 2008

There are some encumbrances which are almost not traceble. for example any charge created through an unregistered deed is not traceble and even all banks also do not create a registered mortgage now a days because of the heavy stamp duty and other complicated procedure. Ther are other untraceble encumbrances are there also so you have to visit all banks, office of Sub-registrars, lispendence register, ROC and many more offices ... in case of a property.