Abstract of Title - A summary of the public records relating to the title to a particular piece of land. An attorney or title insurance company reviews an abstract of title to determine whether there are any title defects which must be cleared before a buyer can purchase clear, marketable and insurable title.
Acknowledgement - A formal declaration before a duly authorized officer (such as a notary public) by a person who has executed an instrument that such execution is his own act and deed. An acknowledgment is necessary to entitle an instrument (with certain specific exceptions) to be recorded, to impart constructive notice of its contents and to entitle the instrument to be used as evidence without further proof. The certificate of acknowledgment is attached to the instrument or incorporated therein.
Chain of Title - The successive ownerships or transfers in the history of title to a tract of land.
Claim - An adverse right or interest asserted by one party against another or against an insurer or indemnitor. Claims may arise from unpaid debts or taxes, as well as from hidden title defects such as fraud, forgery, missing heirs, etc.
Clear Title - Real property ownership free of liens, especially voluntary liens such as mortgages.
Defective Title - (1) Title to a negotiable instrument obtained by fraud. (2) Title to real property which lacks some of the elements necessary to transfer good title.
Description - The exact location of a piece of real property stated in terms of lot, block, tract, part lot, metes and bounds, recorded instruments, or U.S. Government survey (sectionalized). This is also referred to as legal description of property.
Dower - A right that a wife has in her husband's property at the time of his death. Does not exist in all states.
Encumbrance - A legal right or interest in land that affects a good or clear title and diminishes the land's value. It can take numerous forms, such as zoning ordinances, easement rights, claims, mortgages, liens, charges, a pending legal action, unpaid taxes or restrictive covenants. An encumbrance does not legally prevent transfer of the property to another. A title search is all that is usually done to reveal the existence of such encumbrances, and it is up to the buyer to determine whether he wants to purchase with the encumbrance or what can be done to remove it.
Examination (of Title) - The study of the instruments incident to a chain of title to determine their effect and condition in order to reach a conclusion as to the status of the title.
Exception - A provision in a title insurance binder or policy that excludes liability for a specific title defect or an outstanding lien or encumbrance.
Forgery - The fraudulent signing of another's name to an instrument such as a deed, mortgage or check.
Homestead - The dwelling (house and contiguous land) of the property owner. Some states grant statutory protection for homestead property against the rights of creditors. Property tax exemptions are also available in some states.
Index - (1) An alphabetical listing in the public records of the names of parties to recorded real estate instruments together with the book and page number of the record. (2) The listing in abstract and title plants of recorded real estate instruments in groups according to land descriptions, known as a geographic index. (3) The alphabetical listing in abstract and title plants, by names of the parties, of all recorded instruments that affect but do not describe particular real estate, such as judgments, powers of attorney, wills and probate proceedings. Such indexes are known by various names, such as "general index," "judgment index" and "name index."
Instrument - Any writing having legal form and significance, such as a deed, mortgage, will or lease.
Interest - (1) A share or right in property. (2) A charge paid for borrowing money.
Joint Tenancy - An undivided interest in property, taken by two or more joint tenants. The interests must be equal, accruing under the same conveyance, and beginning at the same time. Upon the death of a joint tenant, the interest passes to the surviving joint tenants, rather than to the heirs of the deceased.
Judgment - The determination of a court regarding the rights of parties in an action. Money judgments, when recorded, become a lien on the real property of the party whom the judgment is against.
Judgment Lien - A lien against the property of a judgment debtor. An involuntary lien.
Junior Mortgage - A mortgage lower in lien priority than another.
Land Contract - An installment contract for the sale of land whereby the seller (vendor) holds legal title and the buyer (vendee) has equitable title until the sales price is paid in full.
Legal Description - A description of land recognized by law, based on government surveys, spelling out the exact boundaries of the entire piece of land. It should so thoroughly identify a parcel of land that it cannot be confused with any other.
Lender - Any person or entity advancing funds which are to be repaid. A general term encompassing all mortgagees, and beneficiaries under deeds of trust.
Lender’s Policy - A title insurance policy which insures the validity, enforceability and priority of a lender’s lien. This policy does not provide protection for the owner.
Lis Pendens - A legal notice recorded to show pending litigation relating to real property, and giving notice that anyone acquiring an interest in said property subsequent tot eh date of the notice may be bound by the outcome of the litigation.
Loan Policy - Also called "mortgage policy." A title insurance policy insuring a mortgagee, or beneficiary under a deed of trust, against loss caused by invalidity or unenforceability of a lien, or loss of priority of the mortgage or deed of trust.
Marketable Title - A title which enables an owner to sell his property freely to others and which others will accept without objection.
Mechanic’s Lien - A lien created by statute for the purpose of securing priority of payment for the price or value of work performed and materials furnished in construction or repair of improvements to land, and which attaches to the land as well as the improvements.
Metes and Bounds - A land description in which boundaries are described by courses, directions, distances and monuments.
Notary Public - One who is authorized by the state or federal government, to administer oaths, and to attest to the authenticity of signatures.
Owner's Policy - A policy of title insurance usually insuring an owner of real estate against loss occasioned by defects in, liens against or unmarketability of the owner's title.
Ownership - The right to possess and use property to the exclusion of others.
Plat - A map or chart of a lot, subdivision or community drawn by a surveyor showing boundary lines, buildings, improvements on the land and easements.
Power of Attorney - A document by which one person (called the "principal") authorizes another person (called the "attorney-in-fact") to act for him/her in a specific manner in designated transactions.
Premium - The amount paid for an insurance policy.
Public Records - The records of all documents which are necessary to give notice and are available to the public.
Quiet Title - To free the title to a piece of land from the claims of other persons by means of a court action called a "quiet title" action. The court decree obtained is a "quiet title" decree.
Quitclaim Deed - A deed which transfers whatever interest the maker of the deed may have in the particular parcel of land. A quitclaim deed is often given to clear the title when the grantor's interest in a property is questionable. By accepting such a deed the buyer assumes all the risks. Such a deed makes no warranties as to the title, but simply transfers to the buyer whatever interest the grantor has.
Search - In title industry parlance, a careful exploration and examination of the public records in an effort to find all recorded instruments relating to a particular chain of title.
Special Assessments - A special tax imposed on property, individual lots or all property in the immediate area, for road construction, sidewalks, sewers, street lights, etc.
Subordination - The act or process by which a person's rights are ranked below the rights of others. For example, a second mortgagee's rights are subordinate to those of the first mortgagee.
Subordination Agreement - An agreement by which one encumbrance (for example, a mortgage) is made subject (junior) to another encumbrance. To "subordinate" is to "make subject to," or to make of lower priority.
Tax Sale - (1) Property on which current county taxes have not been paid is "sold to the state." No actual sale takes place - the title is transferred to the state and the owner may redeem it by paying taxes, penalties and costs. If it has not been redeemed within five years, the property (referred to as "tax sold property") is actually deeded to the state. (Similar "sales" to cities take place for unpaid city taxes.) (2) A public sale of property at auction by a governmental authority, after a period of non-payment of property tax.
Tenancy by the Entirety - Ownership by married persons where each owns the entire estate, with the survivor taking the whole upon the other’s death.
Tenancy in Common - An estate or interest in land held by two or more persons, each having equal rights of possession and enjoyment, but without any right of succession by survivorship between the owners.
Title - As generally used, the rights of ownership and possession of particular property. In real estate usage, title may refer to the instruments or documents by which a right of ownership is established (title documents), or it may refer to the ownership interest one has in the real estate.
Title Defect - (1) Any possible or patent claim or right outstanding in a chain of title that is adverse to the claim of ownership. (2) Any material irregularity in the execution or effect of an instrument in the chain of title.
Title Insurance - Insurance against loss resulting from defects of title to a specifically described parcel of real property. Insurance benefits will be paid only to the "named insured" in the title policy, so it is important that an owner purchase an "owner's title policy," if he desires the protection of title insurance.
Title Plant - Also called "abstract plant" in some areas. A geographically filed assemblage of title information that helps in expediting title examinations, such as copies of previous attorneys' opinions, abstracts, tax searches and copies or take-offs of the public records.
Title Search or Examination - A review of all recorded documents affecting a specific piece of property to determine the present condition of title.
Vested - Present ownership rights, absolute and fixed.
Warranty - A legal, binding, promise, given at the time of a sale, whereby the seller gives the buyer certain assurances as to the condition of the property being sold.
Warranty Deed - A deed used in many states to convey fee title to real property. A warranty deed contains provisions under which the seller becomes liable to the purchaser for defects in or encumbrances on the title.
