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Chapter 6: Recordation, Abstracts, and Title Insurance

Public Records

Constructive Notice – recording documents.

Actual Notice – knowledge based on what one has seen, heard, read, or otherwise observed.

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Provide for the recording of every instrument by which an estate, interest, or right in land is created, transferred, or encumbered.

Within each state, each county has a public recorder’s offi ce, known variously as the County Recorder’s Offi ce, County Clerk’s Offi ce, Circuit Court Clerk’s Offi ce, County Registrar’s Offi ce, or Bureau of Conveyances .

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RECORDING ACTS

The public recorder’s office serves as a central information station for changes in rights, estates, and interests in land.

The Recorder’s Role

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ACKNOWLEDGMENT

Abstract of Title

A complete historical summary of all recorded documents affecting the title of a property.

It recites in chronological order all recorded grants, conveyances, recorded easements, mortgages, wills, tax liens, judgments, pending lawsuits, marriages, divorces, etc., that might affect title.

The abstracter will summarize each document, note the book and page (or other source) where it was found, and give the date it was recorded or entered.

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Ownership Proof

Abstract of TitleTitle Insurance

Title commitmentPolicy premiumsLender’s policy Claims for losses

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Title Insurance

The basic principle of title insurance is similar to any form of insurance:

Many persons pay a small amount into an insurance pool that is then available if any one of them should suffer a loss.

In some parts of the United States, it is customary to purchase the title insurance policy through the attorney who reads and certifies the abstract. Elsewhere it is the custom to purchase it from a title company that combines the search and policy in one fee.

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Title Commitment

The Torrens System

A system of land title registration that starts with a landowner’s application for registration and the preparation of an abstract.

This is followed by a quiet title suit at which all parties named in the abstract and anyone else claiming a right or interest to the land in question may attend and be heard.

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Marketable Title

Marketable title is one free from reasonable doubt as to who the owner is.

Marketable Title Acts – stops claims to rights or interest in land that have been inactive for longer than the required statutory period.

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Key Terms

Abstract of title Acknowledgment Actual notice Chain of title Constructive notice

Marketable title Public recorder’s office Quite title suit Title insurance Torrens system

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