When you’re hiring a company to research a property’s title and ensure it is free from any issues that could complicate the sale or cause problems after closing, you want to hire a firm that you know is going to conduct a comprehensive title review. But how far back should this title search dig? In today’s blog, we take a closer look at how far back abstract title searches typically go when a property is being investigated prior to closing.
Researching A Title’s History
How far back a title search goes is based on a few different factors. In some situations, it’s not uncommon for title searches to go back more than 100 years! For others, such a thorough review is not necessary. However, in Minnesota the typical standard review for a title search is a minimum of 40 years, as dictated by the Marketable Title Act. Deeds, mortgages and other potential title clouds will be researched back at least 40 years when investigated by a title search company.
In some instances, a deeper dive into the history of a property may be necessary. Some of the factors reviewed when determining how far back a title search will go include:
For example, if a property has been in one family’s possession for 100 years, it should be easier to conduct a title search that dates back 40, 50, 60 or even 100 years. That said, don’t assume that properties that have stayed in one family for decades are free from potential title defects. There may be divorces, disputed wills, long-long heirs, boundary disputes or more, and these may only show up when someone actually takes the time to look for them during the first sale in a century.
It’s easy to assume that a property that has been sold five times in the last 15 years may have title issues given its complex ownership past, but remember that all of these sales would have included a title search as well, so if all these searches came up clean, there’s a good chance that many potential title issues aren’t really a concern (like disputed wills, boundary disputes, etc.), but potential problems like unpaid property taxes and mechanic’s liens will still need to be investigated thoroughly. If a property has been sold a number of times within the last 40 years, then going back 40 years may provide a clear chain of title custody. If the property hasn’t been sold or had reason to be researched in quite some time, then it pays to extend a search beyond 40 years to clear the title.
Regardless of how far back the search ends up going, it’s always wise to secure a title insurance policy after closing. This one-time payment provides you with peace of mind for as long as you own the property. If an issue is discovered after closing, you won’t be liable because of the protective policy you took out. Your title services team can set you up with a personalized policy based on the individual needs of you and your property.
For more information about title searches and closing on a commercial property, connect with the team at Commercial Partners today at (612) 337-2470.