You have probably heard the word "title" before in a real estate transaction.
When a Buyer makes an offer on a Lake Charles Home for Sale and the Seller agrees and signs the written contract, both parties have an accepted contract and the Lake Charles Home goes "under contract".
The Lender begins working on the Buyer's loan and part of the process that the bank requires is called "review of title". Usually the lender or the REALTOR delivers a copy of the contract and/or property Abstract to the Title Company where the closing will take place. The lender will contact the title company with a request to "open title" on the Lake Charles Home the Buyer is purchasing.
A real estate attorney will review what is known as the "chain of title" to make sure the title is clear of liens, judgments, or other issues. Buyers want to make sure they are receiving a "clear title" from the Seller.
During review of title to a Lake Charles Home, the real estate attorney may discover a title issue. Perhaps the property conveyed to the current owner as an heir but a succession was never done and the deed was not recorded correctly.
Sometimes the Buyer or Seller will prefer to use their own Attorney or an Attorney friend. Nothing against attorneys but not all of them practice real estate law on a daily basis and Louisiana real estate law is different from other states.
Louisiana is now known for having one of the more complex and difficult to understand state civil codes in the US.
In contrast, to other US states who follow the traditional British “common law” system which is based on laws derived from judge-made decisions Louisiana follows Napoleonic law.
One of the main reasons that Napoleon implemented a unique civil code was that it was supposed to be simple enough for anyone to understand – especially the people of his time who lacked formal education While the difference between common law vs Napoleon law is not always easy to explain, it can have very serious implications for people, businesses or other entities who own real estate in Louisiana.
Understanding Real Estate Law
Real estate is a legal term that includes your land (i.e., a lot) along with anything that is built on and upon your land (i.e., a home, a building). Real estate law is the body of law and rules (including zoning laws and restrictive covenants) regulating your title, ownership and use of real estate.
While most individuals use the term real estate, this is a term of art used in common law states. Louisiana is a civil law state, and the proper legal term for real estate is immovable property.
In addition to this difference, there are many other differences in laws and concepts between the other states and Louisiana. These include:
- Settlement of property ownership disputes
- Property usage and access contests
- Zoning issues
- Property settlement and divorce
- Successions and inheritance
- Usage (or usufruct) of property
I recently had a title issue discovered on a Lake Charles Home my Buyer is purchasing. The previous transaction (which was closed with a local bank) had a problem because the Notary who notarized the heir documents also witnessed the documents and that is a big no-no! Now this has to be fixed. This has held up the transaction from closing on time . Instead of doing an extension, the Seller wanted to use the time frame in the contract allowed to clear up title issues.
The Louisiana Agreement to Buy or Sell contains a clause addressing merchantible title allowing a certain length of time to clear up title issues should any be found when reviewing the title to the property.
Lake Charles, LA has a few Title Companies that close transactions without an "in house" attorney. If a problem is discovered, the Title Company has to send the file to the attorney of record to review. Sometimes the real estate attorney is in New Orleans or Shreveport, LA. It is much easier to deal with a problem at the time it is discovered. I prefer to close with a Title Company that has a real estate attorney present. What if there are issues or disputes that arise in the closing? If there are questions I would rather have the real estate attorney step in and explain.
A new Louisiana law will go into effect January 2012 which will require the real estate attorney reviewing title to put their stamp on each page of the title document. This will document who has reviewed title and if there is a problem in the future, it can be traced back to the attorney who performed the title search.
I think this is an excellent idea, and will prevent errors and hopefully prevent delays in closing due to title issues. Some Title Companies that have been careless could be held accountable in the future.
You always get what you pay for ....Sure we all want to save our clients money but I don't recommend cutting corners on your Lake Charles Home Purchase with discount title or attorney fees!
For more information on Lake Charles Real Estate, visit my website. You can search homes for sale in Lake Charles, Louisiana, and view up to date information on Lake Charles Subdivisions, Neighborhoods
If you are planning a move to or from the Lake Charles, LA area, I can help! I am a full time Realtor licensed by the Louisiana Real Estate Commission and am affiliated with:
4410 Nelson Road, Lake Charles, LA, 70605 USA
337-478-1578 or 337-499-9592
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