December 01, 2015

Real Estate Titles and Why They Are Important

David J. Cook
From The Debt Collector’s Handbook: Collecting Debts, Finding Assets, Enforcing Judgments, and Beating Your Creditors, Chapter 5.

If you are planning to enforce the judgment against the real property, securing a “good” and “marketable title” after the enforcement of judgment is paramount. Good title means that the owner has title or ownership according to the recorded documents. The most common title is fee simple, which means that the person is the owner of 100 percent of the legal and beneficial interest in the property. A person with a life estate is entitled to the ownership, and beneficial use, during his or her life. Life estates are estate planning devices that vest title in a surviving spouse who is usually spouse #2, and upon that person’s death, the property goes to the children of the original owner. Marketable title means that the title insurer is willing to write a policy of title insurance to a person who is going to buy the property. What is marketable title? Answer: The property is free of defects, blemish, clouds, or irregularities and enables the title company to write a policy for the buyer.

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