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Certificate of Title

Function: noun

A Certificate of Title is a statement provided by an abstract company, title company, or attorney stating that the title to real estate is legally held by the current owner. In addition to identifying the current owner, a Certificate of Title will also provide other valuable information regarding the status of the property, including any existing easements or encumbrances on the land and buildings located on the property. Full disclosure of the status of the property on the certification of title can help lenders and potential buyers to be fully informed of the current situation of the asset, and thus make a decision about whether to move forward with the proposed transaction. There are several sections in the certificate of title. One addresses the physical property such as the address and details about the land, and descriptions about the building, as well as notes about the general condition of the property. The certificate of title also names the current owner and gives additional backup information that is helpful to identify the owner. The last part of the certificate of title identifies any claims that exist against the property.