ABSTRACT
Every real estate due diligence investigation begins with a close look at title. Legal title to a parcel of real estate encompasses far more than simple ownership of the property itself. The textbook definition of real estate is land and anything attached to the land, such as buildings, structures, and fixtures. But that is just part of the story. Title to real estate refers not just to the tangible aspects of property—that is, the land and its permanent improvements—but also to the valuable intangible legal entitlements that arise from real estate ownership. The market value of the property is determined by the value of the land, and its improvements, as well as by the value of the legal “bundle of rights” that accompany land ownership. This chapter explains commonly encountered legal interests in land, encumbrances on title that reduce the value of real estate, deed covenants and servitudes, and the manner in which title to property is conveyed and recorded in public land record offices. The capacity and authority of fiduciaries and business entities to convey title to real estate is also explored, as are the title risks that arise from different forms of real estate co-ownership.
