What is an Affidavit of Title?
An affidavit of title is a legal document provided by the seller at closing in which they swear under oath that they are the rightful owner of the property, that there are no undisclosed liens, encumbrances, or defects in the title, and that they have the legal right to sell the property. It is a standard part of most real estate closings.
What it covers
The affidavit typically states: the seller is the sole owner (or identifies all owners), the property is free of undisclosed liens, there are no undisclosed easements or encumbrances, no one else has a claim to the property, there are no pending lawsuits affecting the property, all property taxes and assessments are current, and the seller has not done anything that would cloud the title since the title search was conducted.
Why it matters
The affidavit fills the gap between the title search date and the closing date. A title search shows the state of the title as of a specific date, but the seller could have taken out a new loan, received a judgment, or granted an easement between the search and closing. The affidavit is the seller's sworn statement that nothing has changed.
Legal consequences
Because it is a sworn statement, making false claims in an affidavit of title can result in perjury charges, civil liability, and the potential unwinding of the transaction. This provides an additional layer of protection for the buyer beyond title insurance.
In wholesale transactions
The seller provides this affidavit whether the deal is a traditional sale or a wholesale assignment. For double closes, the wholesaler may need to provide an affidavit for the A-to-B transaction and the seller's original affidavit covers the initial contract.