Chain of Title & Abstract of Title in Real Estate

Instructor: Racquel Fulton

Racquel is a Real Estate Licensee and holds a New Jersey Title Insurance Producer Certification

If you want to know the names of everyone who has ever owned a specific property, you would have to conduct a chain of title search. In this lesson, we will look into how to search a chain of title and how to create an abstract of title in real estate.

Searching the Title

Laurie owns a home that was built more than 60 years ago. She heard that a celebrity once owned the home and wants to search the home's history to see if it's true. To learn the name of every person who has ever owned her home, Laurie will need to search her property's chain of title. A title is a bundle of legal rights including the right to own and use a property. Each time a home is sold, the title transfers from one owner to the next, forming a chain of title.

A chain of title search is customarily performed by professionals like title searchers, abstractors, and title companies; however, homeowners like Laurie can perform a search as well. Property owners and everyone else has the right to search the history of a home's title because title records are a part of public records.

Laurie begins her search by visiting the local county recorder's office. In some states, the recorders office is referred to as the county clerk or recorder of deeds. The office maintains public records such as deeds, mortgages, and satisfactions. To search through a chain of title, Laurie focuses on deeds. A deed is a legal document that grants title to a property from a seller, who is the grantor, to a buyer, who is the grantee. Each time a seller (grantor) grants title to a buyer (grantee), it creates a new link on a chain of title.

Linking the Chain

Laurie starts by looking for her name in the grantee index. The grantee index is a database containing the names of every person who has been granted title to a property. Laurie looks up her name first because her title is the most recent link on her home's chain of title. Laurie can also search the grantor index and find the names of anyone who has sold a property. However, because she doesn't know the names of her home's previous owners, she has to search backward beginning with herself to link one owner to the previous owner.

Laurie finds her name in the index along with related details about her title. So Laurie writes down her name, deed, ID number, sales date, and the name of the seller (grantor) who granted the title to her.

Laurie Bob 10002 04/27 1077777777

Laurie then searches the name of the seller (grantor) to see who transferred the title to him.

Bob Mary 10098 02/16 1077778888

She continues this process, writing down each link in the chain of title. Laurie is stumped when she comes across a questionable transfer of the title.

A Break in the Chain of Title

Whenever a transfer of title is inaccurate or fraudulent, it causes a break in the chain. Breaks in a chain of title can be classified as either minor or major. A minor break in a chain of title is commonly caused by human error, such as a grantor failing to sign all of his or her rights of the title over to a new owner. Minor breaks may be fixed by filing a corrective deed. Major breaks in a chain of title are caused by negligence or fraud. Fraudulent transfers of title result when someone who has no legal rights to a title transfers it to someone else. Major breaks in a chain of title are corrected by filing an action of quiet title. An action of quiet title is a legal proceeding in which a judge issues a ruling to cure the break in the chain.

Fortunately, Laurie realizes that there was not a break in her property's chain of title. She was able to verify that a break did not occur by researching and gathering additional public records. So to get a complete history of the home's title, Laurie decides to compose an abstract of title.

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