Items excluded from coverage can be found in section two of Schedule B of the policy. MORTGAGE – A temporary conditional pledge of property to a creditor as security for the payment of a debt that may be cancelled by payment. To avoid a defective The first is to perform a title search, which most real estate attorneys would be happy to do for you. Each of these may be in a different person. In United States law, typically evidence of title is established through title reports written up by title insurance companies, which show the history of title (property abstract and chain of title) as determined by the recorded public record deeds;[1] the title report will also show applicable encumbrances such as easements, liens, or covenants. COVENANT – A formal agreement or contract between two parties in which one party gives the other certain promises and assurances, such as covenants of warranty in a warranty deed. It sets forth the conditions to be performed incident to the object deposited in escrow, and gives the escrow agent instructions with respect to the disposition of the object so deposited. Firefox, or For such items, possession is the simplest indication of title, unless the circumstances give rise to suspicion about the possessor's ownership of the item. JOINT TENANTS – Two or more persons who hold title to real estate jointly, with equal rights to share in its enjoyment during their respective lives with the provision that upon the death of a joint tenant, his share in the property passes to the surviving tenants, and so on, until the full title is vested in the last survivor. THIRD PARTY – A term usually applied to persons who are not principal parties to a contract or other instrument, but who have some right, interest or duty that such contract or instrument affects. Title definition real estate is defined as someone who has legal ownership and a right to use their piece of property. VESTING – How ownership of title is taken. Land cannot be sold if there are liens on the property. Buyers get a preliminary title report from an escrow agent or attorney within a week after they reach mutual acceptance on an offer. Such liability may be created by contract, such as a mortgage, or by operation of law, such as a mechanics lien. Real Estate Glossary Many terms in real estate are universal throughout the nation. or abstractors to search out the chain of title and provide a report so [3] In the case of vehicle ownership, a simple vehicle title document may be issued by a governmental agency. In addition to the payment of principal, a promissory note usually provides for the payment of interest. BROKERAGE – A fee or commission paid to a broker. Finally, to protect you should you discover that there is a problem with your title after you purchase the house, one option is to buy title insurance. The certificate of title, therefore, is a statement of opinion that a title company or attorney believes the property is owned free and clear—based on researching available public records. PREMIUM – The amount payable for an insurance policy. In some states, the term is also used for a refinance rate. REFINANCE RATE – When referring to title insurance, the refinance rate is the reduced rate for a loan policy issued on the new loan in a refinance transaction, in which the original loan was previously insured within some period of years. During the sale of a property, the owner must guarantee to the buyer that the title being conveyed is free and clear of anyone else’s claims. Deeds are the legal documents that transfer the title between people. Conveyance of the document may be required in order to transfer ownership in the property to another person. Was this document helpful? Prior to the establishment of the United States title to Indian lands in lands controlled by Britain in North America was governed by The Royal Proclamation of October 7, 1763. TITLE – (1) A combination of all the elements that constitute the highest legal right to own, possess, use, control, enjoy, and dispose of real estate or an inheritable right or interest therein. CLAIM – A right to assert, or the assertion of, a demand for payment of money due; or the surrender or delivery of possession of property or the recognition or some right. Conveyance of the document may be required in order to transfer ownership in the property to another person. MARKET VALUE – An average between the highest price that a buyer, willing but not compelled to buy, would pay and the lowest price a seller, willing, but not compelled to sell, would accept. ENDORSEMENT – Addition to or modification of a title insurance policy that expands or changes coverage of the policy, fulfilling specific requirements of the insured. REALTOR – A copyrighted trade name that can be legally used only by those belonging to the National Association of Realtors. You may wish to consult an attorney or tax advisor to determine the most advantageous form of ownership for your particular situation. In these instances, someone from the past could come back to take title of the property.Â. FEE SIMPLE – The highest degree of ownership that a person can have in real estate. Both a certificate of title and a deed are written documents that are used to provide proof of ownership. INTESTATE – Dying without leaving a legal will. Although the idea of legal title can be applied to anything, people most often use it to refer to real estate and automobiles, because those are substantial purchases which can have complicated ownership arrangements. (2) In a broader sense, one who holds or possesses lands and tenements by any kind of title. SIMULTANEOUS ISSUE RATE – When referring to title insurance, the simultaneous issue rate is the reduced rate for a loan policy or owner’s policy issued on the same property or loan at the same time as another policy. Sometimes if a certain piece of land has been in one's family for generations, the owner might be forgotten. For a one-time-only premium, the named insured and their heirs are protected against title defects, liens and encumbrances existing as of the date of the policy and not specifically excluded from it. METES AND BOUNDS – Describing boundaries by using courses, directions, distances and monuments. The extinguishing of ancient, forgotten, or unasserted claims, such as E's in the example above, was the original purpose of statutes of limitations. from estates, certificates of death of a joint tenant, foreclosures, judgments In some cases, a title can also serve as a permanent legal record of condemnation of property, such as in the case of an automobile junk or salvage title. Information on the certificate of title includes the name of the owner and information about the property. Proof of legal acquisition, such as a bill of sale or purchase receipt, is contributory. (2) The rights of ownership recognized and protected by the law. Paramount title is the best title in Fee simple available for the true owner. It may also refer to a formal document, such as a deed, that serves as evidence of ownership. A title can represent ownership of a real asset such as a car or an intangible property or assets such as a trademark. TITLE COVENANTS – Covenants ordinarily inserted in conveyances and in transfers of title to real estate for the purpose of giving protection to the purchaser against possible insufficiency of the title received. It is the killing off of an existing debt by regular partial payments. This can impact the exercise of rights or complicate the resale of a property. ABSTRACTER – The person or company engaged in making abstracts. Visit our professional site », Created by FindLaw's team of legal writers and editors Learn more about FindLaw’s newsletters, including our terms of use and privacy policy. For real property, land registration and recording provide public notice of ownership information. Writing a contingency into the home purchase agreement saying that if no clear title is proven by the current owner, you may back out of the agreement at any time. ), An Educational Initiative of the American Land Title Association This way you won't be forced to buy a home that has a defective title. ATTORNEY’S OPINION – The written statement of an attorney setting forth what he believes to be the condition of a real estate title. Even though you may have bought a house, and made the mortgage payments, you may not necessarily have a clear title to your property. The name of the property owner will be documented on the title. Title issues can have a huge impact on the rights to real property and a person's ability to sell it. In property law, a title is a bundle of rights in a piece of property in which a party may own either a legal interest or equitable interest. Defective titles can result in problems establishing ownership, which can complicate resale or impact the exercise of rights over the property. Abstract of Title is the summarized historical legal record of a piece of property. The rights in the bundle may be separated and held by different parties. SUBDIVISION – An area of land divided into lots, blocks and building sites, and in which public facilities are laid out, such as streets, alleys, parks and easements for public utilities. Conveyance is the act of transferring ownership of a piece of property from one party to another. RISK RATE – When referring to title insurance, the risk rate is a rate that does not include the cost of researching the title or the cost of conducting the closing. If a preliminary title report reveals liens against prior owners or other clouds on the seller’s title, the closing attorney or title company will work to clear those liens. ENCUMBRANCE – A claim, right or lien upon the title to real estate, held by someone other than the real estate owner. In property law, a title is a bundle of rights in a piece of property in which a party may own either a legal interest or equitable interest. A certificate of title is not a guarantee of a free and clear title. The deed is commonly known as the vehicle of the property interest transfer, and the transfer can be for less than the title that's owned. PUBLIC RECORDS – The transcriptions in a recorder’s office of instruments that have been recorded, including the indexes pertaining to them. The Home Closing 101 Real Estate Glossary provides simple definitions for some of the most common terms you can expect to hear during the closing process. SURVEY – (1) To determine the location, boundaries, area, or the elevations of land and structures upon the earth’s surface by means of courses in relation to the North Star, and the measuring of angles and distances by using the techniques of geometry and trigonometry. JUDGMENT – A conclusion or determination by a court of law usually awarding the payment of money or relief of some kind to one of the parties to a lawsuit. Common methods of holding title include sole ownership (such as a single man or woman) or co-ownership (such as community property, community property with right of survivorship, joint tenancy or tenancy in common). For all involved parties to have an accurate assessment of ownership, public record-keeping is necessary as it provides legal and public notice regarding an entity’s interest in a specific piece of property. Public records normally list any encumbrances on the property, such as liens or easements. A certificate of title is a state or municipal-issued document identifying the owner of personal or real property. For example: When a person having legal title to property dies, heirs at law or beneficiaries per the last will, automatically receive equitable interest in the property. In the world of real estate, the title embodies the right or evidence of the right of ownership of real property. Please consult with your local title company, real estate agent or lender to see if these terms apply in your area.