A title study is an analysis that is carried out to find out what the legal situation of a property is. For this, an attorney reviews the property’s background.
Cases in which it is done
Usually, this is done in two situations:
1. Before buying: in this case the future buyer wants to be certain of the legitimacy of the property, that the seller is really the owner and all the legal conditions of the property. In this way, it is prevented that it is a scam or that the property has a problem that may affect the future (for example, a mortgage, seizure, third party rights, expropriation, etc.).
2. To mortgage: the bank or financial institution will be in charge of carrying out a title study before mortgaging a property, as this way they will be sure that the property will support the payment of the loan.
Documents required for the study
An analysis of the background of the seller, the property and technical background will be done as follows:
• Copy of the identity card of the seller and buyer
• Certificate of marriage, widowhood, divorce or affidavit of single status from the seller
• Promise of sale
• Certificate of tradition and freedom of ownership
• Copy of the deed
• Copy of the co-ownership regulations, if applicable
• Mortgage certificates
• Copy of the commercial appraisal
• Proof of payment of property tax
• Peace of mind of valorization
Title Study Costs
The value may vary depending on the lawyer and/or the bank. However, according to Asobancaria, the cost is 0.12% of the value of the property.
If the title study shows that there are no observations, you can continue with the sale or mortgage process with peace of mind.
In case the study has observations, it is best to wait for the seller to solve the problem before continuing with the purchase or looking for another property.