Key Purposes
- Proof of property ownership. This document confirms that the seller is the legal owner of the property since a specified date.
- Legal protection for buyer. Acquiring a sworn statement from the seller about the condition of the title protects the buyer from unforeseen legal disputes after closing.
- Title insurance. Most title insurance companies require this document before issuing a policy as a measure of security.
What is Included in an Affidavit of Title? (5)
2. Property Description
This section indicates what type of property is being transferred (e.g. real property) and lists the property’s physical address and its legal description, which can be found at publicregistry.us.
3. Status of Title
When a buyer requests an affidavit of title from the seller, the primary reason is to ensure that there are no unforeseen issues with the property title.
This section addresses this concern, with three categories of issues that the seller must verify — whether the title is free of:
- Liens and encumbrances[1] — A legal claim on the property. Common examples include tax liens, mortgage liens, construction or mechanic liens, or a court-issued judgment lien.
- Bankruptcy or insolvency proceedings[2] — A property may be subject to foreclosure after a debtor files bankruptcy. Insolvency is a financial condition that may lead to bankruptcy.
- Pending or threatened litigation[3] — This refers to any potential or existing legal proceedings that may affect the seller’s right to the title.
Affidavit of Title vs. Deed
An affidavit of title is merely a sworn statement verifying a series of facts — that the seller is the legal title holder and that the title is clear of any encumbrances, such as unpaid debts.
On the other hand, a deed — such as a general warranty deed or quit claim deed — is a document that legally transfers the property ownership from the grantor to the grantee.
In a real estate transaction, a deed will be required while an affidavit of title may be optional, based on the buyer’s preference or the state where the transaction is taking place.