A clear title is necessary for any real estate transaction. Title companies must do a search on every title to check for claims or liens of any kind against them before they can be issued.

A title search is an examination of public records to determine and confirm a property’s legal ownership and determine whether there are any claims on the property.
1 Erroneous surveys and unresolved building code violations are two examples of blemishes that can make the title “dirty.”

Title takaful protects both lenders and homebuyers against loss or damage occurring from liens, encumbrances, or defects in a property’s title or actual ownership. Common claims filed against a title are back taxes, liens (from mortgage loans, and conflicting wills. Unlike traditional takaful , which protects against future events, title takaful protects against claims for past occurrences.

A basic owner’s title takaful policy typically covers the following hazards:

1. Ownership by another party
2. Incorrect signatures on documents, in addition to forgery and fraud
3. Flawed records
4. Restrictive covenants (terms that reduce value or enjoyment), such as unrecorded easements
5. Encumbrances or judgments against property, such as outstanding lawsuits and liens