Introduction To Title Searching Part One

Title searching answers questions about property ownership, sale prices, mortgages, liens, and court cases.

Although a how to article can not replace the experience of title searching itself, I will attempt to give a realistic overview of real estate conveyancing (transfer of ownership rights) and the search process.

In addition, recognition of title constitutes the legal criteria for ownership.

We discuss three general topics:

1. Property identification


2. Initial search


3. Second level search - indexes and documents

Real Estate Conveyancing
Real estate conveyancing systems are methods developed by societies to enable the regulated exchange of real property. Although these systems are corrupted and sometimes inefficient and in need of change, they constitute the "rules of the game" for property ownership, without which we could not easily perform property research.


Real estate conveyancing concerns the definitions of deeds and mortgages, and the "keeping track" of property transactions over time. In simple terms, 'title" means the "rights" of ownership to property, generally real estate, but personal property as well; cars, for example.


Real property contains a bundle of rights, which are not all transferred at one time. Ownership "rights" vary from "fee simple," which means complete ownership, to more restricted meanings such as easements which usually grant special use of the property and to mineral or air rights, in which only specific rights are transferred at one time.


Mortgages and liens are restrictions on title as well, and if not complied with may result in title ownership transfer. Although possession of property has often constituted ownership, evidence and public.

Today most states have title laws, which define how real estate transactions are to be conducted and recorded. Real estate conveyancing systems, whether Recording or Torrens/Registry, have accomplished three objectives:

• They establish priority of ownership and give absolute notice.
  
• Purchasers are protected from unknown (unrecorded) transactions or interests.
  
• Public information exists to verify ownership and title status.
  

Recording Systems

The Recording System of titles records evidence of title transactions. In this system, title does not exist in a physical form - as a document. Instead, an "abstract" of title or summary of title transactions (e.g. deeds, mortgages, and liens) can be established through a formal title search. Sometimes owners kept detailed abstracts, which they regularly update; these can still be found in libraries and attics.

The Recording System stipulates that valid title or interest in a property is not enforceable until such time as the particular transaction is recorded with the County containing the property parcel. If one party records title transactions before another, his or her "rights" predominate. It is also necessary that buyers qualify as "bona fide purchasers," that is, that they have not been given "notice" of transaction.

The Recording system typically contains two sets of records: a) the legal record in the Grantor-Grantee Index which consecutively lists transactions by property and names; and b) the Tract Indexes, used by the public for title searches, record transactions by parcel, block. township, and section.

Although sometimes unwieldy, the Recording System requires no special title examiners, and is inexpensive for buyer and sellers.

Registry or Torrens

Torrens is used in eight states or counties. Torrens and Registry are synonymous terms, "Torrens" referring to Sir Robert Torrens of Australia, who first developed the system in the 19th century.

Torrens is based upon title origination by local courts. After court action establishes title every subsequent transaction for a property is registered on a Torrens Certificate which the County retains.

Torrens was adopted in situations where title origins were clouded, as was the case in Chicago's Loop after the Great Fire of 1871. Thus local governments guarantee title (by ordinance rather than insurance), records transactions, and serve public notice.

Most Counties stopped adding properties to the Torrens system in the 1980’s because of the high cost of initial litigation, somewhere between $3,000 and $4,000 per property. Torrens has also been accused of inefficiency; there are extremely long waits for copies of Torrens Certificates.

Generally speaking, the Torrens System is an anachronism, which lives on, in a limited number of counties throughout the USA.

In England until the Real Estate Use Act of 1845, "livery of seison" defined real property exchange. The transfer of property ownership had to be symbolized by the physical exchange between the parties, on the property itself, of a "corporeal" representation of the property, such as dirt, a branch, or a stone.

From the 17th century, however, there occurred a gradual "alienation" or abstraction from the symbolic act of property transfer, and the introduction of written deeds. Interestingly, according to Patton on Titles, "We do not know the origin of the process of the transfer of title by written instrument." Today in most of England, except for London and London County, which use the Torrens System, buyers and sellers exchange original written titles. Public records are checked for liens and judgments, but do not alone provide sufficient evidence of title.

The first American deed is said to have been recorded in the Plymouth Colony of Massachusetts in 1627. In the ensuing decades, Records Acts of surprising similarity were adopted in most of the colonies, and generally stipulated the use of the Recording rather than Registry system of titles.

The Recording System, partially derived from the Dutch, has been attributed the status of an American invention. After the American Revolution, with the acquisition of the Northwest Territories and the Louisiana Purchase, Recording Laws were among the first laws to be legislated, replacing the French or Spanish systems.