ABSTRACT OF TITLE

A sample abstract of title

A condensed history, taken from public records or documents, of the ownership of a piece of land.

An abstract of title, or title abstract, briefly summarizes the various activities affecting ownership of a parcel of land. When a person or business agrees to purchase real estate, that person or business arranges for an examination of the history of the property’s title. This examination is known as a title search. A title search is conducted to determine that the seller of the property in fact owns the property and has a free-and-clear title. A free-and-clear title has no clouds on it, which means that no person or business other than the seller has an interest in, or claim to, the property.

The process of determining the precise own-
ership of a piece of land by searching an abstract
is complex and laborious. Often, the title
abstract does not contain every transaction or
proceeding that may affect ownership of the
land. The search conductor, or abstractor, usually
a trained professional, must verify that the
abstract is complete by reviewing recent certifi-
cations that the abstract is correct, checking for
gaps in dates and certification numbers, and
ensuring that a proper legal description appears
with each entry. The abstractor conducts a credit
and finances check on all the names appearing in
the abstract to see if any of the parties has filed
for BANKRUPTCY or has incurred other debts that
may have caused a creditor to file a lien against
the property toward payment of the debt.

An abstractor must refer to many different sources to verify that the title to a parcel of land is true and correct. The abstractor verifies the original government survey, which should include gaps and overlaps in land ownership. Given improved technology, surveys have a margin of error of less than one foot. The abstractor must understand the various means of describing the exact boundaries of a piece of land and must recognize unacceptable methods.

Claims on the title to a property are subject to time limitations, but the limitations have certain exceptions. For example, the Forty-Year Law holds that no party with a potential claim that arose over 40 years before can claim an interest in a property of which one person or business has been the recorded owner for at least 40 years. Exceptions are made, however, for those holding mortgages or contracts with terms that span more than 40 years and also for prior interests claimed as school or school district lands, park-land dedications, or the property of religious corporations or associations.

To perform a title search, the abstractor must obtain a copy of the abstract from the
county recorder in the county in which the land is located. Then it takes time to make sense of the document. The accompanying sample abstract of title illustrates typical entries.

1. Entry 1 identifies the land in question. The sample abstract is for platted land, which is
land described by lots and blocks. A platted parcel spans a certain number of feet, on a
certain lot, within a certain block, within a certain city. Another method of identifying a
parcel of land is by metes and bounds. For metes and bounds land, a parcel is identified
by its boundaries according to their terminal points and angles. Platted descriptions are
used in urban areas, and metes and bounds descriptions are used mostly in rural areas.

2. Entry 2 is the original entry. It states the time
and place that the U.S. government first con-
veyed this tract of land to a private individ-
ual. The description follows a progression
from small to large. The parcel is identified
first by its location within a certain section,
which is located within a certain township,
which is located within a certain range. Each
range spans six miles and several townships,
and each township contains several sections,
which in turn are divided into quarters,
which can also be divided into quarters. The
last two lines of the right-hand column
might read, for example, “Land Office
Records, page 100. North ? of Section 36, T.
[Township] 32, R. [Range] 22.” The original
description of any parcel of land comes from
the measurements of the original govern-
ment survey of the nineteenth century.

3. Entry 3 is the land patent, or John Doe’s title
defense. The land patent is issued by the gov-
ernment to operate as proof of title for the
first governmentally recognized owner of
the land. The land patent shows the date of
the land transfer, the date the patent was
filed with the government, the particular
book of deeds containing the patent, and the
land parcel as described in the original entry.

4. Entry 4 reveals that John Doe platted his
quarter of section 36—that is, he subdivided
the land and dedicated it to the public for
sale. The beginning of the entry might read,
“Plat of Stoneybrook Addition to the City of
New Heidelberg.”Note that township 36 has
become, or has been incorporated into, what
is now New Heidelberg. The entry continues
with the date John Doe received approval
from the city of New Heidelberg, the date
the subdivision was filed with the county,
the particular book of plats in which the
subdivision is entered, and the original
description of the land. The subdivision is entered in the county’s book of plats becauseNew Heidelberg has chosen to identify itsland parcels by plats, and not metes andbounds. Other means of identifying landparcels are sometimes employed. Land issometimes identified by acres in rural areas,and by government lots for land adjacent tomeandering lakes, but most of the land inthe United States is identified by either platsor metes and bounds.

5. Entry 5 shows that John Doe sold a parcel ofthe subdivision to Richard Roe. Roe receiveda warranty deed, which serves as evidence ofDoe’s title. A WARRANTY deed means thatDoe has warranted to Roe that Doe is therightful owner of the land. This type of deedhas legal ramifications that benefit the purchaser,here Roe. There are other types ofreal estate deeds. A purchaser receives a taxdeed, for example, when he or she buys realestate sold for nonpayment of taxes, and thispurchase involves procedures that differfrom those of other land purchases. A sheriff’s deed is given to the purchaser of landsold by court order such as in a mortgageforeclosure, and this transaction also hasspecial legal ramifications for the purchaser.Because the land in the sample abstract isplatted, the parcel is assigned a lot number,within a certain block, within the city ofNew Heidelberg—for example, this entrymight read, “Lot 1, Block E, StoneybrookAddition to City of New Heidelberg.” Theentry also contains information on when thewarranty deed was signed and when it wasfiled with the county.

6. Entry 6 shows that Richard Roe and RuthRoe have mortgaged their property to JohnSmith.With an interest in lot 1 of block E ascollateral, Smith has paid for the Roes’ property,and the Roes have undertaken to repaySmith. The entry shows the date the mortgage agreement was signed and the date the mortgage was filed with the county. The remainder might read, “Book 1 of Mortgages,page 10, to secure $10,000, due January10, 1910. Lot 1, Block E, Stoneybrook Addition.”

7. Entry 7 shows that John Smith has assignedthe mortgage on lot 1, block E, to WilliamWhite. In other words, Smith has sold toWhite his mortgagee interest in lot 1, blockE. An assignment can occur for any numberof reasons, but often it is a sale made to satisfydebts. This particular action is entered inthe book of assignments in the county seat.

8. Entry 8 shows that Richard Roe and RuthRoe have paid off, or satisfied, the mortgage(et ux is Latin for “and wife”). This entry isfiled in the book of assignments in thecounty seat.

9. Entry 9 reveals that Richard Roe has died.This “Will and Probate” entry reports that,upon his death, Roe seeks to transfer ownershipof lot 1, block E, in New Heidelberg, tohis wife, Ruth Roe.

10. Entry 10 identifies Ruth Roe as the soleowner of the parcel. The probate court,which tends to property matters surroundingthe death of an individual, has approvedthe assignment of lot 1, block E, contained inRichard Roe’s will.

11. Entry 11 shows that Ruth Roe has taken outa mortgage on lot 1, block E. She has borrowedmoney from Samuel Brown, using thereal estate as collateral. The entry is identicalto the first mortgage agreement with JohnSmith, entry 6.

12. Entry 12 reveals that Ruth Roe was unable tomake her mortgage payments to Samuel Brown, and Brown has sought payment byexercising his right to force a sale of theproperty by foreclosing on the mortgage.The forced sale was published in a newspaper.The dates of public notice, the publicationAFFIDAVIT, and the service of notice toRoe are all entered in the abstract. The certificateof sale and the date the forced salewas filed with the county are also included.This entry shows that Brown has purchasedlot 1 at the resulting sheriff ’s sale of theproperty. The amount Brown paid woulddepend on the value of the real estate andthe amount of the mortgage. The “No. 11”following “Foreclosure of” simply refers tothe court document number of the foreclosure.

13. Entry 13 shows that Samuel Brown andSophy Brown have sold a part of lot 1 toJames Jones by quitclaim deed. Generally, aquitclaim deed transfers title to propertywithout warranties that the title is free andclear. Owing to Ruth Roe’s financial troubles,the Browns are probably uncertain oftheir title’s completeness, so they have chosento sell parts of their lot by quitclaim deedinstead of warranty deed. Jones now owns anorthern piece of lot 1, block E, of StoneybrookAddition.

14. Entry 14 shows the taxes paid on the property,except for the current year. An entry oftaxes paid is listed every time a tax assessmentis made or paid in relation to the propertyof the abstract. Taxes listed in theabstract may include estate taxes, inheritancetaxes, capital gains taxes, and localgovernment property taxes. The abstractshould include the current amount of thesetaxes and certification that they have beenpaid.

15. Entry 15 reveals that, to avoid financial disaster, James Jones has filed bankruptcy. The northern piece of lot 1, block E, Stoneybrook Addition, New Heidelberg, is now beingused to secure protection from creditors. Jones has given to the bankruptcy court atrust deed, which the court retains until Jones has fulfilled his obligations under the financial rehabilitation plan approved by the court. Should Jones default on this arrangement, the court could order a forced sale of the property, with proceeds going to Jones’s creditors. The land covered by this particular abstract has now been defined; it is a certain northern piece of lot 1 of block E in the Stoneybrook Addition of New Heidelberg. The land to the south of this piece would have its own abstract, which would be identical to this abstract up to the point that lot1 was divided up and part of it sold to Jones. Likewise, the abstract for the adjacent lot 2 on block E would have an abstract identical to this abstract up to the point that John Doe sold to Richard Roe the newly platted land of section 36 in township 32, range 22.

ABSTRACT OF TITLE