부동산 지식 18-TITLE RECORDS
TITLE RECORDS
State laws require the recording of all documents that affect rights and interests
in real estate in the public real estate records of the county where the property is
located. These public records, or title records, contain a history of every parcel
of real estate in the county, including names of previous owners, liens,
easements, and other encumbrances that have been recorded.
Deeds, mortgages, liens, easements, and sale contracts are among the documents
that must be recorded. Other public records that affect real estate title are
marriage, probate, and tax records.
Generally, a County Recorder’s Office or other similarly named office maintains
the title records.
Title records serve a number of purposes, not the least of which is to
avoid ownership disputes. Other important purposes are:
Public notice
Title records protect the public by giving all concerned parties
constructive notice of the condition of a property’s legal title:
who owns the property, who maintains claims and
encumbrances against the property.
Buyer protection
Title records protect the buyer by revealing whether a property
has marketable title, one free of undesirable encumbrances. The
buyer is legally responsible for knowing the condition of title,
since it is a matter of public record. Recording a transaction also
protects a buyer by replacing the deed as evidence of ownership.
Lienholder protection
Title records protect the lienholder by putting the public on notice
that the lien exists, and that it may be the basis for a foreclosure
action. Recording also establishes the lien’s priority.
Chain of title
Chain of title refers to the succession of property owners of record dating back to
the original grant of title from the state to a private party. If there is a missing
link in the chronology of owners, or if there was a defective conveyance, the
chain is said to be broken, resulting in a clouded title to the property. To remove
the cloud, an owner may need to initiate a suit to quiet title, which clears the
title record of any unrecorded claims.
Abstract of Title. An abstract of title is a written, chronological summary of the
property’s title records and other public records affecting rights and interests in
the property. It includes the property’s chain of title and all current recorded liens
and encumbrances, by date of filing. A title abstractor or title company analyst
conducts the search of public records, called a title search, needed to produce an
abstract. Insurers and lenders generally require the search to identify title defects
and ascertain the current status of encumbrances.
A title plant is a duplicate set of records of a property copied from public
records and maintained by a private company, such as a title company.
Recording system
There are no federal recording standards. Each state prescribes procedures
and requirements for recording in public title records: forms, proper
execution, acknowledgment, and witnessing.
The Torrens system. Certain states and counties use the Torrens system of
recording. The Torrens system differs from other title recording systems in that
title passes only when the conveyance has been duly registered on the title
certificate itself. Encumbrances likewise have no legal effect until they are
recorded. In effect, the Torrens title record is the title itself. It is not necessary to
search public records to ascertain the status of title; it is all reflected on the title
certificate.
To enter a property in the Torrens system, a court action must first clear title by
giving notice to all potential interest holders that they must express their claims.
At the end of the proceeding, the court decrees that the title is accepted into
Torrens registration. The Torrens registry retains the original registration
documents and provides copies to the recorder or other appropriate office. All
subsequent transactions affecting title must follow the proper Torrens recording
procedures and requirements.
Title evidence
Since the value of a property is only as good as the marketability of its title,
the evidence supporting the status of title is a significant issue. To
demonstrate marketable title to a buyer, a seller must show that the title is
free of
doubts about the identity of the current owner
defects, such as an erroneous legal description
claims that could affect value
undisclosed or unacceptable encumbrances
The four principal forms of evidence the owner can use to support these
assurances are:
a Torrens certificate
a title insurance policy
an attorney’s opinion of the title abstract
a title certificate
Torrens certificate. If available, the Torrens certificate is the best evidence,
for the reasons given earlier– it is not merely a record, but is the title itself.
Title insurance. In the absence of Torrens registration, a title insurance policy is
commonly accepted as the best evidence of marketable title. A title insurance
policy indemnifies the policy holder against losses arising from defects in the
insured title.
The common policy types are the lender’s policy and the owner’s policy, which
protect the respective policy holders’ interests in the property. Thus, a lender
who holds an $80,000 mortgage on a property will obtain protection worth
$80,000 against the possibility that the lender’s lien cannot be enforced. The
owner’s policy will insure against defective title to the extent of the property’s
initial or appreciated value.
An owner’s policy may have standard coverage or extended coverage.
Standard coverage protects against title defects such as incompetent grantors,
invalid deeds, fraudulent transaction documents, and defects in the chain of
86 Principles of Real Estate Practice
title. Extended coverage protects against liabilities that may not be of public
record, including fraud, unrecorded ownership claims, unintentional recording
errors, and unrecorded liens. Extended coverage may also protect against
adverse possessors, boundary disputes, and prescriptive easements. Neither
standard nor extended coverage insures against defects expressly excluded by
the policy or defects that the owner might have been aware of but did not
disclose.
Before issuing a title insurance policy, a title company conducts a title search
to uncover defects in title or unrecorded breaks in the chain of title. If the
search fails to discover any uninsurable defects, the company issues a binder,
or commitment to insure. The binder recapitulates the property description,
interest to be insured, names of insured parties, and exceptions to coverage.
Attorney’s opinion of abstract. An attorney’s opinion of abstract states that
the attorney has examined a title abstract, and gives the attorney’s opinion of
the condition and marketability of the title. Generally, an opinion is not a
proof or guarantee of clear title. Further, it offers no protection in the event
title turns out to be defective.
Title certificate. A title certificate is a summary of the condition of title as of
the date of the certificate, based on a search of public records by an abstractor
or title analyst. The certificate does not guarantee clear title against defects,
unrecorded encumbrances or encroachments.
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