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LEGAL DICTIONARY

Certificate of Title

What Is a Certificate of Title?

A certificate of title is a legal document that identifies the owner of either real or personal property. This type of certificate is often used to provide evidence of vehicle and real estate transactions. However, it can be used to demonstrate ownership in transferring any property with a title.

The certificate does not represent proof of a free and clear title. An attorney or title company must complete a title search of public records as part of real estate transactions.

What Does a Certificate of Title Mean?

A certificate of title names the person who has the legal right to a property. In the case of a loan, the certificate of title remains with the lender until the borrower has repaid the entire loan. At that point, a government agency issues a new certificate of title in the new owner's name.

The title does not contain detailed information about the loan or previous owners of the property, nor does it include the name and address of the owner. The document does identify the property, including the address for the property or the vehicle identification number (VIN) of a car.

What Is the Certificate of Title of a Car?

A certificate of title for a vehicle contains the owner's name and address, the VIN, and license plate number, serving as a record of ownership of the car.

When someone sells their car, a vehicle bill of sale is not the only documentation you need. In addition to this document, a seller releases ownership to a buyer by signing the certificate of title over to them. The new owner must complete the transfer of ownership by taking or mailing the signed title to their local Division of Motor Vehicles (DMV) office.

The DMV will check to make sure there are no liens on the vehicle before printing and mailing a new certificate of title to the new owner of the vehicle. They will also brand the title if the car in question has been badly damaged through theft, flooding, or collision. A "salvage" designation will remain on the vehicle title from that point onward.

Additionally, a car owner can use a certificate of title to obtain a loan. In this case, the vehicle serves as collateral for the loan, and the loan company holds the title as a lienholder. When the loan and all associated fees have been paid in full, the loan company will release the lien. The DMV then removes the lien designation from the title.

Certificate of Title in Real Estate

A certificate of title shows the rightful owner of personal or commercial property. The document serves as legal proof that an individual owns a house or a piece of land.

In order to avoid any potential conflicts over a property, a title insurance company carries out a title search (or assessments) to determine who the legal owner of a property is before a certificate of title is issued.

Before selling a property, the seller must present the certificate of title as proof of ownership. However, a certificate of title does not stipulate that no encumbrances, liens, or easements exist on the property.

Although any liens, easements, or other encumbrances should be part of the public record, sometimes they are not recorded or reported properly. For this reason, title insurance companies must take pains to ensure that a certificate of title is issued to the rightful owner of the property before the loan process begins.

How to Fill Out a Certificate of Title

A certificate of title for a vehicle is straightforward to complete. The document contains the following information:

  • Your legal name
  • Your address
  • Vehicle identification number
  • Vehicle body type and usage
  • Vehicle's year, make, model, and color
  • Vehicle license plate number
  • Odometer reading (from odometer statement) and date it was read

The title application process can differ slightly from state to state, as well as the fees and taxes that apply. Be sure to visit your state's DMV website to determine the requirements.

Helpful Resources

Bankrate - Certificate of title Definition
Doorloop - What Is A Certificate Of Title
The Business Professor - Certificate of Title - Explained

What Is a Certificate of Title?

A certificate of title is a legal document that identifies the owner of either real or personal property. This type of certificate is often used to provide evidence of vehicle and real estate transactions. However, it can be used to demonstrate ownership in transferring any property with a title.

The certificate does not represent proof of a free and clear title. An attorney or title company must complete a title search of public records as part of real estate transactions.

What Does a Certificate of Title Mean?

A certificate of title names the person who has the legal right to a property. In the case of a loan, the certificate of title remains with the lender until the borrower has repaid the entire loan. At that point, a government agency issues a new certificate of title in the new owner's name.

The title does not contain detailed information about the loan or previous owners of the property, nor does it include the name and address of the owner. The document does identify the property, including the address for the property or the vehicle identification number (VIN) of a car.

What Is the Certificate of Title of a Car?

A certificate of title for a vehicle contains the owner's name and address, the VIN, and license plate number, serving as a record of ownership of the car.

When someone sells their car, a vehicle bill of sale is not the only documentation you need. In addition to this document, a seller releases ownership to a buyer by signing the certificate of title over to them. The new owner must complete the transfer of ownership by taking or mailing the signed title to their local Division of Motor Vehicles (DMV) office.

The DMV will check to make sure there are no liens on the vehicle before printing and mailing a new certificate of title to the new owner of the vehicle. They will also brand the title if the car in question has been badly damaged through theft, flooding, or collision. A "salvage" designation will remain on the vehicle title from that point onward.

Additionally, a car owner can use a certificate of title to obtain a loan. In this case, the vehicle serves as collateral for the loan, and the loan company holds the title as a lienholder. When the loan and all associated fees have been paid in full, the loan company will release the lien. The DMV then removes the lien designation from the title.

Certificate of Title in Real Estate

A certificate of title shows the rightful owner of personal or commercial property. The document serves as legal proof that an individual owns a house or a piece of land.

In order to avoid any potential conflicts over a property, a title insurance company carries out a title search (or assessments) to determine who the legal owner of a property is before a certificate of title is issued.

Before selling a property, the seller must present the certificate of title as proof of ownership. However, a certificate of title does not stipulate that no encumbrances, liens, or easements exist on the property.

Although any liens, easements, or other encumbrances should be part of the public record, sometimes they are not recorded or reported properly. For this reason, title insurance companies must take pains to ensure that a certificate of title is issued to the rightful owner of the property before the loan process begins.

How to Fill Out a Certificate of Title

A certificate of title for a vehicle is straightforward to complete. The document contains the following information:

  • Your legal name
  • Your address
  • Vehicle identification number
  • Vehicle body type and usage
  • Vehicle's year, make, model, and color
  • Vehicle license plate number
  • Odometer reading (from odometer statement) and date it was read

The title application process can differ slightly from state to state, as well as the fees and taxes that apply. Be sure to visit your state's DMV website to determine the requirements.

Helpful Resources

Bankrate - Certificate of title Definition
Doorloop - What Is A Certificate Of Title
The Business Professor - Certificate of Title - Explained