Real Estate Closing Documents Explained: Affidavit of Title

In both New York and New Jersey, an affidavit of title is a closing document prepared and executed by the sellers.  This affidavit is sworn to or affirmed by the sellers in the presence of a notary public, and it is made in order to induce the buyers to accept the sellers’ deed and purchase the property based on the representations contained therein.  These representations include, without limitation, the following:

1. That the sellers are the owners of the property being conveyed and have been the sole owners since a specified date
2. That the sellers are over the age of 18
3. That there are no other tenants or occupants in possession of the property
4. That there are no unpaid taxes, assessments, or utility charges against the property
5. That no one has questioned or challenged the sellers’ ownership rights in the property
6. That there have not been any improvements to the property since, at a minimum, the preceding 4 months, so as to ensure that no mechanic’s liens could be filed by unpaid contractors
7. That there are no outstanding liens or encumbrances affecting title or judgments against the sellers*
8. The marital history of the sellers
9. That there is no outstanding child support orders or judgments against either of the sellers
10. That there are no outstanding liens or surcharges against the sellers with the Department of Motor Vehicles

With respect to #7, an exception is typically carved out for those known liens, encumbrances, or judgments that are stated in the title report and shall be satisfied by the closing proceeds.  The most common exception is the sellers’ unpaid mortgage, which is paid at the time of closing – or in advance – by the sellers from the closing proceeds.  Before the closing date, the sellers must obtain a payoff quote from their lender, good thru the date of the closing, along with a per diem rate to be added to the payoff amount in the event that the closing date is pushed back at all.  Another common reason why the per diem rate may be added to the payoff amount is when the settlement agent believes that the payoff will not arrive for a couple of days – such as when a closing is scheduled on a Friday afternoon.  In that case, the settlement agent will calculate the payoff with additional per diem charges added to ensure that the payoff amount covers an expected delay in the delivery of payoff funds.

The affidavit of title is but one document that a seller must complete on or in advance of the closing date, and it is legally enforceable in the event that any of the foregoing representations made by sellers is determined to have been untrue.

Disclaimer: The information contained in this post is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. We invite you to contact us and welcome your calls and communications. Contacting us, however, does not create an attorney-client relationship.