When dealing with real estate law, the phrase “color of title” can be a confusing one. Understanding what it means and why it matters can help real estate professionals, homeowners, and those involved in purchasing and developing land make sure their rights are protected.
What Does Color of Title Mean?
Color of title is a term used to describe a legal situation in which a person is claiming ownership of a piece of real estate but with a title that is defective in some way. It occurs when a person claims legal title to a property but is unable to produce satisfactory documents to support that claim. In essence, that person claiming ownership may have documents that appear to authorize ownership, but the documents are either fraudulent or insufficient to establish legal ownership.
Why Does Color of Title Matter?
When a person has a color of title to a particular piece of land, it can create a situation in which two different parties have valid claims to the same piece of real estate. This can lead to a dispute between the two parties and possible legal action to determine true ownership. In these cases, a court will examine the evidence presented by both parties to help determine who legitimately owns the land.
Additionally, when purchasing property, buyers should always be sure the seller of the land has the right to sell it. When someone is selling property with color of title, they may not have the legal right to do so, and this can leave the buyer open to legal repercussions. Buyers should always research a property and verify the legitimacy of ownership before closing a real estate transaction.
Conclusion
Color of title is a legal concept that is important to understand when dealing with real estate. Understanding the concept and being aware of how it can affect a real estate transaction can help protect everyone involved in the transaction. Proper research and consultation with an experienced real estate lawyer can help buyers ensure they are purchasing a legitimate piece of property.