Title diligence is often treated as a formality, but a thorough exercise covers ownership chain verification, encumbrance checks, and confirmation that all required regulatory approvals are in place and current.
The ownership chain review traces title back through prior transactions, checking for gaps or unresolved claims that a simple registry search would not surface on its own.
Encumbrance checks confirm whether the property carries any existing mortgages, liens or litigation that would transfer with ownership, which can materially change the value of a transaction.
A properly documented diligence report gives a buyer or lender a clear risk picture before funds move, which is far less costly than discovering an issue after a transaction has closed.