What Is Opinion of Title?
The opinion of title is the legal opinion which attests to the validity of the title deed to a parcel of property. The opinion is sometimes issued in conjunction with an insuring title agency.
Breaking Down Opinion of Title
Opinions of title are usually issued by attorneys. Title companies use the opinion made by the attorney to issue a document called a title report. This is a legal document that can be used in varying ways, but is most often in the process of purchasing a property, researching ownership, or verifying a lien status.
Example of a Title Report
A title report that is being pulled during the process of purchasing a home will list varying degrees of information. They generally show the current ownership of the property, the manner in which the title is held, and any encumbrances or liens that currently exist against the property that could interfere with the mortgage company’s ability to fund a loan. The mailing address and the legal address, when they differ, will also be listed. As will the legal description, longitude and latitude, and parcel numbers.
Many lenders require additional documentation with title reports such as tax certifications that list all real estate taxes that are collected in connection with the property, as well as any unpaid balances that remain open. Many states also require an attorney to provide a document called a closing protection letter. This is an additional piece of insurance that further verifies that the attorney who reviewed the title policy, and issued the opinion of title, stands by the information provided and assumes responsibility for any legal recourse that could arise due to erroneous reporting.
It could cover anything from liens that are not correctly recorded to transferring ownership without actually having the legal authority to do so.
They also assume responsibility in the case of probate that all legal matters have been settled and that estates are open to transfer.
The title company providing the title report will charge various fees to provide the legal document, including a request for title insurance. The title insurance premium is collected to ensure against any issues that should arise and to cover any additional costs or losses that the attorney and title company may incur.
Opinions of title can also be issued for reasons other than obtaining a mortgage. Verifying easements, encroachments, oil deposits, and mineral rights also require title opinions. In addition, there are opinions for drilling, acquisition, and other transactions.