Humber/Ontario Real Estate Course 1 Exam Practice

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What is the primary purpose of a preliminary title search?

Determine zoning compliance
Identify any existing liens or encumbrances
Estimate the property's market value
Assess the structural integrity of the building

The correct answer is: Identify any existing liens or encumbrances

The primary purpose of a preliminary title search is to identify any existing liens or encumbrances on a property. This step is crucial as it ensures that the title to the property is clear, meaning there are no unresolved issues that could affect ownership. By revealing liens, encumbrances, or claims against the property, the preliminary title search protects potential buyers from unforeseen legal issues that could arise after a transaction is completed. While determining zoning compliance, estimating market value, and assessing structural integrity are all important considerations in real estate transactions, they do not fall under the primary objectives of a title search. Zoning compliance is typically addressed through local government regulations, market value is established through appraisals, and the structural integrity involves physical inspections of the property rather than title concerns. Therefore, ensuring clear ownership through the identification of liens or encumbrances remains the fundamental goal of performing a preliminary title search.