Why is a 13-year legal search report required in mortgage applications?

Question

Accepted Answer

A 13-year legal search report is required in mortgage to ensure the property's legal status and minimize risks.

A 13-year legal search report provides a comprehensive overview of the property's legal history.
It helps identify any potential legal issues or encumbrances on the property.
Lenders require this report to assess the risk associated with the mortgage.
It ensures that the property has a clear title and is free from any legal disputes.
Examples of information included in the report are ownership history, liens, judgments, and easements.
The report helps protect both the lender and the borrower from any unforeseen legal complications.

Accepted Answer

A 13-year legal search report is required in mortgage to ensure the property's legal status and minimize risks.

A 13-year legal search report provides a comprehensive overview of the property's legal h...read more

Title Verification – Confirms that the seller or mortgagor has a legal and undisputed ownership of the property.

Encumbrance Check – Identifies any mortgages, liens, or other claims that could affect the lender’s security.

Litigation History – Ensures that the property is not involved in any ongoing or past legal disputes.

Compliance with Laws – Verifies that the property complies with local land laws and regulations.

Fraud Prevention – Helps detect fraudulent transactions or ownership claims.

The 13-year period is based on the legal principle of adverse possession in many jurisdictions, where undisputed ownership for a certain period can validate a claim. However, some lenders or regions may require a 30-year search for added security

Accepted Answer

13 year legal search report is required in mortgage to ensure the property's legal status and minimize risks

Accepted Answer

As per the section 65 of Limitation Act, a person has a period of 12 years to claim his possession over the scheduled land in question, which is also known as Doctrine of Adverse Possession. Hence, there must be a search for minimum period of 13 years.

Accepted Answer

There is a need for a legal search report of 13 years. It shows that if the property is mortgaged somewhere or not, we get to know how the property has come to the current user.

Asked in IDFC FIRST Bank

Why is a 13-year legal search report required in mortgage applications?

Top Branch Credit Manager Interview Questions Asked at IDFC FIRST Bank

Interview Questions Asked to Branch Credit Manager at Other Companies