In the context of property law, the term “chain of title” refers to the series of title transactions (i.e., documents transferring ownership) for a particular piece of real property, dating all the way back to its original owner to the property owner who presently holds title. Essentially, a chain of title is meant to represent the historical timeline of title holders for a specific realty.
In general, a chain of title is typically maintained and persevered through the use of official, written documents. After being executed, such documents are usually submitted to a local registry office or to the county “recorder of deeds” where the real property is located.
These offices are responsible for storing copies of documents that may help establish a chain of title for the property in question.
In the event that you are purchasing or selling real property, it is important that you know the overall ownership history contained in the chain of title. This way you can be sure that the title you are buying or selling is valid.
What Types of Documents Can I Use to Prove Chain of Title?
A chain of title for real property may be established by a variety of verifying documents, including:
- The deed to the property;
- Foreclosure documents (if any);
- Decrees or decisions from judgments of distribution;
- Decisions from a judgment or other documents used in a lawsuit to quiet title;
- Death certificates from joint tenants or other relevant parties; and
- Various types of records that would indicate the transfer of real property titles.
When Does Chain of Title Come into Play?
Whenever a person decides to buy or sell real property, they need to record their transaction with a local registry office. This will ensure that the chain of title reflects any of the changes made by and associated with the new property owner.
In addition, a purchaser of a home should also conduct a title search to determine a few things. First, a title search will generally ensure that the party selling the home actually holds valid title and has the right to sell that property.
Secondly, it will reveal whether there are any encumbrances on the land (i.e., issues that might restrict the enjoyment and use of the land. These include mortgages, easements, and so on).
The following is a list of other situations where chain of title issues may also come into play, such as:
- If there are questions as to how the property passed from one owner to another;
- When there is a dispute between two buyers regarding which one of them actually purchased the title first;
- Where it is unclear whether the title is marketable;
- Where a seller did not in fact have legitimate title to a property;
- Whenever the validity of a deed or title is in question (i.e., defective title); and
- When another party presents a deed that is outside the chain of title (also called a “wild deed”).
What Happens If There is a Dispute over the Chain of Title to My Property?
There are several recurring issues that may cause a dispute to arise over a chain of title. One common situation is where a person contracts to purchase a home, but a third party intervenes and claims the property as their own. The third party may argue that the property was transferred to them by a previous owner through a will or during a separate sale.
The best and quickest way to resolve a situation like the one above is to conduct a title search. A title search will help settle whether the third party has a valid claim or not.
Searching the title chain can be done by contacting the recorder of deeds for where the particular property is situated. From there, it should be possible to view the chain of title, starting with the purchaser’s own deed and tracing all the way back to the original owner.
Additionally, the chain of title should also reflect the true owner. For example, a wild deed (i.e., those not recorded in the chain of title) is usually not considered to be valid. As such, a person who holds an invalid wild deed will not be considered the true property owner.
In contrast, the party who has a recorded deed to the property will generally prevail over one who claims the property without a recorded deed. Hence, why recording real estate documents is one of the most important aspects of real property sales.
It should be noted, however, that conducting a title search can be confusing and thus may require the assistance of a qualified real estate attorney. The reason as to why title searches can be difficult is because each state has a different set of laws concerning recording acts. Recording acts are basically rules outlining how to properly record real estate transfers.
Recording acts frequently come up as one of the main issues in a chain of title dispute. The issue usually appears in scenarios where one party is from out of state and is not familiar with the procedures required by the local recording acts. As discussed, improperly recording real estate transactions can cause a buyer to lose the property to another party.
Do I Need to Hire a Lawyer for Issues with My Chain of Title?
It is crucial that you have a basic understanding of how the chain of title can affect your real estate matters, especially when it comes to transferring title.
Therefore, if you have any questions or concerns, or are involved in a dispute regarding chain of title, you may want to speak to a local real estate attorney. Your lawyer will be able to assist you with conducting a title search, and can represent you in court if there is a matter in dispute.