When a person sells a house, vacant land, or other piece of property, there are certain requirements that must be followed. Most states require an affidavit of title.
An affidavit of title is a document specifying that a property seller owns the property.[1] In addition, in an affidavit of title, the seller swears under oath that certain other facts about the property are correct.[2] An affidavit of title offers many benefits to a buyer. Primarily, it provides added protection against the seller for the buyer that the property is free and clear of any major legal problems involving claims of ownership by other parties. In addition, the affidavit offers the buyer another written document to be used against a seller if any future problems come up when someone claims to have a lien against or ownership of the property. Finally, an affidavit of title can offer guarantees about the property that may not otherwise be available to the seller.
An affidavit of title is usually required by a title company, which issues title insurance at the closing, to ensure that the property is free and clear of any claims and that there are no other owners of the property.[3] The title company will require the seller to execute an affidavit of title to ensure that any problems are cleared up at the time of closing. An affidavit of title is designed to protect the buyer from outstanding legal issues that might be facing the seller. If an issue arises later, after the transaction closes, the buyer has possession of a physical document that can be used should some legal action need to be taken.
Every affidavit of title may differ in its details, depending upon the circumstances of the real estate transaction and the state in which it occurs. While every state law is different, generally speaking, an affidavit of title will contain:
The name and address of the seller;
A statement that the seller is the true owner of the property;
A statement that the seller has not sold or entered into a contract to sell the property to another buyer;
A statement that there are no liens against the property to be sold;
A statement that there are no assessments against the property; and finally,
A statement that the sellers have not declared bankruptcy. For an affidavit to be valid, it must be notarized. Frequently, there may be exclusions from the affidavit of title. For instance, there may still be a mortgage on the property that has not been paid off at the time the parties are ready to close on the real estate transaction. As a result, there may be a statement in the affidavit that there is an exclusion for the mortgage on the property.
If there is something in the affidavit of title that is an area of concern for the buyer, the buyer can notify the seller that the item must be remedied prior to closing. This could be as simple as having the seller clear a lien, or something more involved, such as paying for an updated survey of the land allotment and any easements[4] upon it. If a seller provides any fraudulent information in the affidavit they are committing the crime of perjury[5] and can be fined or even imprisoned for doing so.
An owner’s affidavit is given at the sale of any real property. An owner’s affidavit confirms that the owner owns what they think they own. The owner’s affidavit states that they own the property, there are no liens, or non-recorded easements. Owner’s affidavits also might indicate that they have not worked on the property in the last 90 days.[6] The owner’s affidavit is not recorded in public records but kept on file with those it indemnifies. An owner’s affidavit’s significance is tremendous and consulting an attorney with any questions or concerns of foregoing matters can provide peace of mind when buying real estate.
[1] Affidavit of title, Black’s law dictionary (11th ed. 2020). [2] Affidavit, Black’s law dictionary (11th ed. 2020). [3] Title insurance, Black’s law dictionary (11th ed. 2020). [4] A property easement is a legal construct in which the title to a specific piece land remains with the landowner, but another person or organization is given the right or interest to use that land for a distinct purpose. [5] Perjury is a legal term for a crime against justice in which an individual has lied under oath. [6] This is important for concerns over unpaid contractors in particular.