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Abstract Title Laws

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What is an Abstract Title?

In real estate, an abstract of title is an important document that details the transaction history and any proceedings relating to a particular parcel of property. The legal history of a property is one of its most important elements, and is a powerful tool for anyone who is interested in purchasing a piece of real property.

When buying real estate, you need to know about any potential problems it may have before you finalize the sale. For instance, if there are liens on a home you wish to purchase, you need to what they are and how much is owed. You should also avoid survey issues. You don’t want any claims floating around, such as an ex-spouse who claims to have ownership, though he or she is not named on the title.

An abstract of title should show all types of transactions that were recorded at the county courthouse for the property you are considering purchasing. Anything that is on record at the courthouse will be on the abstract. You can protect yourself from anything that was not recorded, by purchasing title insurance. You should have an experienced attorney read the abstract and make notes on potential issues. Do not sign anything until your lawyer has had the chance to review the abstract.

What is Usually Contained in an Abstract Title?

Usually, an abstract of title will include records of occurrences such as: wills, conveyances, grants, liens, tax liens, homeowner association (HOA) liens, encumbrances, deeds, mortgages, litigation, tax sales, surveys and notes, easements, and so on. In order to keep the abstract manageable with such a large quantity of information, only the most important information on the property will be pulled from the documents and prepared.

The condensed, or abstract of all the important pieces of information will typically summarize the original grant, subsequent changes in ownership, whether there are any encumbrances, and also a statement on its accuracy put forth by the individual who prepared the abstract.

What Does a Marketable Title Mean?

Legally, a title is evidence of ownership. When one party sells a piece of real estate to another party, the title is transferred to the new owner. A marketable title is one that is unlikely to have claims brought against it by an outside party. A marketable title is usually reasonably free of defects and liens, and it is unlikely to be subject to a lawsuit.

An unmarketable title to a piece of land may have issues such as mortgages, encumbrances on the land, zoning law violations, or problems relating to obtaining the land through adverse possession.

Before you purchase a parcel of land, be sure to have evidence of a good, marketable title. It is important to have solid evidence so as to prevent an outside party from attempting to make any claims on your new purchase. Evidence of a marketable title include:

  • An abstract of title;
  • A certificate of title;
  • A title insurance policy; and/or
  • A warranty of title.

These records and documents identify pertinent information and the history of your property. The factual basis of the records often stem from the examination of a real estate attorney of property records. A warranty of title is a solid way of ensuring a title is good, as the property cannot be sold if there are claims pending.

Title insurance helps to protect a property owner from potential risks associated with the title. For instance, errors or omissions in the property title may create a liability for monetary damages as a result from liens or other issues. It is of utmost importance to perform a thorough title search before purchasing property. Running a title search can be complex, which is why utilizing the expertise of an experienced real estate lawyer is essential.

Though most people believe hiring an attorney would be more expensive than hiring a title company, this is often not the case. Sellers are often overcharged by title companies, because they typically accept the company who the purchaser picked.
Real estate agents will often steer clients toward a title company, but it pays to do a little research. Many real estate attorneys charge less, and they also come with the legal expertise concerning the settlement.

Do I Need a Lawyer for Assistance with Abstract Title Laws?

If you are in need of assistance with laws relating to an abstract title, you should contact a real estate attorney near you. The laws governing abstract titles can vary greatly from state to state, and an experienced lawyer will be able to advise you of the rules and regulations in your own jurisdiction. Your attorney will provide guidance, and assist you throughout the entire transaction, helping to ensure the quality of your purchase and minimizing the risk to you.

Photo of page author Sarah Tipton

, LegalMatch Legal Writer

Last Modified: 07-31-2018 11:54 PM PDT

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