What is an Affidavit Of Title?
An affidavit of title is a legal document provided by the seller of a piece of property that explicitly states the status of potential legal issues involving the property or the seller. The affidavit is a sworn statement of fact that specifies the seller of a property holds the title to it. In other words, it's proof that the seller owns the property. It also attests that certain other facts about the property are correct—as sworn to by the seller and duly notarized.
For example, someone looking to sell real estate would need to provide an affidavit of title indicating that the property is theirs to sell, that the property is not being sold to another party, that there are no liens or unapaid taxes against the property and that the seller is not in bankruptcy proceedings.
- An affidavit of title is a notarized, legal document provided by the seller of a piece of property attesting to the status of and certain facts about the property, including ownership and the presence of any legal issues.
- An affidavit of title is designed to protect the property's buyer.
- Most states and title companies require affidavits of title in real estate transactions.
Understanding Affidavit Of Title
An affidavit of title is designed to protect the buyer from outstanding legal issues that might be facing the seller. If an issue arises at a later date, after the transaction, the buyer has possession of a physical document—one that contains sworn statements by the seller—that can be used in court or should some of legal action need to be taken.
Most states require an affidavit of title as part of the legal paperwork required for transferring property from one party to another. An affidavit of title is also generally required by the title company before it will issue title insurance.
Contents of an Affidavit of Title
Guidelines for an affidavit of title can vary from state to state. Generally, though, the basic contents include personal details about the seller, including a name and address. In addition there are statements to the effect that:
- The seller is the true and exclusive owner of record for the property being sold.
- The seller is not concurrently selling the property to anyone else.
- There are no liens or assessments outstanding against the property.
- The seller has not declared bankruptcy or is not currently in bankruptcy proceedings.
Beyond that, there can be specific exclusions given in an affidavit of title. For example, the affidavit of title may note that there is a mortgage remaining on the property that will only be paid off after closing or that a specific lien or issue does exist, but is in the process of being settled or dealt with. Broader exclusions include things like easements, encroachments and other issues that may not be shown on public records.
If an exception in the affidavit of title 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 upon it.
Real Life Example of an Affidavit of Title
Affidavits of title can be used for real estate transactions other than purchases. The New York State Dept. of Parks and Recreation has an affidavit of title form it uses for non-profits seeking grant money for construction projects. The form first has the seller, "the owner in fee simple of the property,", indicate when they acquired the property, with the date and recording number of the deed.
Second, there's a clause that states: "During the entire period of such ownership, said property was in the possession of said owner or owners; that such possession was peaceable and undisturbed, and title thereto was never disputed, questioned or rejected. I/We know of no facts by reason of which such possession or title might have been called into question or by reason of which any claim to any part of said property or interest therein adverse to said ownership might have been set up. There are no judgments against such owner or owners unpaid or unsatisfied of recorded entered in any Court of this State or of the United States. Said property is free and clear of all mortgages, attachments, judgments, leases, tenancies, easements, licenses, charges, estates, unpaid taxes and assessments, unredeemed or uncancelled tax sales, contracts of sale, actions or proceedings that may affect the same, or of any and all other rights, liens and encumbrances whatsoever…"
Four other clauses follow, including room to state exceptions, if any.