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Checking a property for encumbrances

When you like real estate, you need to perform all the necessary checks to secure your ownership. This can be done in person, but there is always a danger of missing a detail. Therefore, you can contact a real estate lawyer to make the necessary inquiries and check the property for encumbrances.

The encumbrance of a property represents the registered rights to the property of third parties. If there is an encumbrance on the property and you purchase it, the third party’s rights will be adverse to yours.

How do I check for encumbrances on a property?

Reference to encumbrances in rem is made to the Registry Agency. Encumbrances may vary from a mortgage to a registered claim. The check is done by the owner’s SSN and property identifier. The Certificate of Encumbrances is prepared by a Registry Judge noting all entries, notations and deletions on the property for a specific period of time. It is best if the certificate is made for a 10 year period back.

Mortgage and foreclosure of real estate

Mortgages and foreclosures are the most common encumbrances imposed on real property. Mortgages are security in rem of creditors, most often banks or other financial institutions. Several mortgages may be imposed on real estate and some of them may be cancelled over time. If more than 10 years have elapsed and the mortgage has not been renewed, an interested party may apply for its cancellation.

A foreclosure is a security which renders void the transfer of real property to third parties against the creditor. Foreclosures are recorded to give rise to actions against purchasers. All foreclosures are noted on the certificate.

The cancellation of encumbrances shall take place at the request of the creditor or the right holder. In practice, it often happens that an old unliquidated foreclosure has remained. Therefore, in any case of purchase of real estate, we advise you to carry out a property inspection for encumbrances. The certificate of encumbrances should be reviewed by a good property law solicitor, who will notify you in the event of any problems, and assist you in clearing the encumbrances.

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