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Title – Transfer of Title

Title Search

  • A title search is an examination of all the public records to determine whether any defects exist in the chain of title.
  • Title searches also make a note of any other encumbrances on the property

Abstract of Title

  • An abstract of title is a report of what was found in a title search, searching virtually all public records related to the property’s title, such as previous deeds and liens. These records are usually found in the county recorder’s office or land records office of the county in which the property is located.

Chain of Title

  • A historical “chain” linked from the first recorded title of a property down through each subsequent conveyance. 

Abstract and Opinion

  • An attorney providing a short summary of the title report.

Preliminary Title Insurance

  1. Name of the insured party
  2. The legal description of the property
  3. Estate or interest covered
  4. Conditions and stipulations
  5. Schedule of exceptions

Certificate of Title

  • A statement of opinion prepared by a title company, licensed abstractor, or attorney on the status of title to a parcel of real property, based on an examination of public records.

Title Insurance

Protection for the buyer against previous title defects that may become known in the future. Owner’s policy purchased by seller insures up to contract price; Lender’s policy purchased by buyer insures lender up to the balance of the loan.Title insurance can be purchased on its own or as a supplement to an attorney’s opinion of title or a certificate of title.

Title insurance protects the buyer, defending the new owner if any future claim is made against the property title.

The title insurance premium is paid once, at the closing.

The insurer’s liability cannot exceed the policy face amount unless an inflation rider is included.

Standard Coverage Policy

insures against:

  • Defects found in public records.
  • Forged documents.
  • Incompetent grantors. Incorrect marital statements. Improperly delivered deeds.

Extended Coverage Policy

insures against:

  • All perils insured against by the standard coverage policy.
  • A property inspection, including unrecorded rights of persons in possession.
  • Examination of the survey.
  • Unrecorded liens not known by the policyholder.
  • Coverage beyond a standard A.L.T.A. title policy insuring most of the legal exceptions such as
  • facts which a survey would show,
  • parties in possession and
  • Unrecorded mechanic’s liens.

TYPICAL EXCLUSIONS

  • Defects and liens are listed in the policy—defects are known to the buyer.
  • Changes in land use brought about by changes in zoning ordinances. 

TYPES OF POLICIES

  • Owner’s policy

They are issued for the benefit of the owner.

  • Lender’s Policy

In many cases where a mortgage loan is involved, the lender requires a title policy that covers the lender’s portion of the purchase price.

Potential title problems and resolution

Marketable Title

  • The chain of ownership (title) to a particular property piece is clear and free from defects.
  • It can be marketed for sale without additional effort by the seller or potential buyer. 

Insurable Title

  • The property may have a known defect or defects in the chain of title.
  • However, with an insurable title, a title insurance company has agreed in advance to provide insurance against the defects ever affecting the ownership or value of the property.
  • UNMARKETABLE TITLE can still be transferred, but its defects may limit or restrict its ownership.

Transferability

  • A characteristic of value indicating that a property has a good title and marketable title. 
  • Title searches, title abstracts, chain of title

Potential title problems and resolution

A cloud is something that casts doubts on the grantor’s ownership of the property.

A defect that may adversely affect the marketability of a title, such as an unreleased lien. Clouds may often be cleared up by a quitclaim deed or a quiet title suit.

Suit to quiet title

A court action to establish property ownership when the title is clouded.

A court action to remove a cloud on title and determine one’s right to an ownership interest.

The clear title has been expanded to mean no problems such as illegal structures or unpermitted property improvements. In general, though, proof of a good title can be accomplished in several different ways.

 
 
 

Courtesy of Jack

150 years ago, Molly sold her farm by using her maiden name rather than her married name by which she acquired the farm.  This results in:

a) a gap in the chain of title 📍 📍 📍 

b) forfeiture of the land Molly’s heirs

c) condemnation by the local government

d) a severe property tax reduction