“Title” generally refers to property rights, or “interests”. A search of a property’s title is the only and best way to determine a property’s rights and interests.
There is no definitive summary of property rights that is available anywhere. Therefore, one must search that property’s record (log) for them. Land records in the US are maintained at the county level for all properties within that county.
Tax records do not guarantee ownership. As a matter of fact, there is zero guarantee of ownership in the US at all. Really! One must search the property’s record (log) of documents and then make a best guess.
Even then, a perfect search of a property’s record may not find all valid documents affecting a property, because one or more of the documents may have been improperly prepared, signed, or even improperly recorded under another property’s record.
Improper recording does not necessarily make a document invalid. Misrecording is referred to as an index error and is very common. Improper language in documents affects validity. So does the way documents are signed, by whom, and under what circumstances (duress, forgery, and many other defects).
| This is why, after performing a perfect title search, attorneys can only issue what is called a “Title Opinion Letter” stating only their opinion of a property’s ownership, rights and other interests. |  |
A property’s record or log – Documents are presented to the county recorder’s office and made official record on their computer system – added to a property’s record. Documents are recorded in the order in which they are received. The first document recorded is senior to the second, and so on. Seniority is important when a property sells, as liens get paid off (out of sales proceeds) according to seniority – sometimes there may not be enough sales proceeds to pay off all liens.
So, seniority matters, and can also be changed, regardless of when it was recorded – some documents make themselves superior or inferior to other documents, by law or by their intentional wording.
Can Any Kind of Document be Recorded on A Property?
No. Only those that affect property rights. There are specific types for specific purposes, and their language for validity & recordability is dictated by law and/or the recorder’s office. The recorder’s office may refuse to record any document they feel does not meet those standards.
If they accidentally record a document that has some defect they missed, it may be later discovered and have its validity challenged in court.
Typical documents recorded include deeds, mortgages, liens, leases, purchase/option agreements, easements, rights of way, etc.
Can Any Document Ever be Removed From a Property’s Record?
No. But, a document can either be a) released – by having a release document prepared, executed, and recorded or b) the document can expire: Some documents are subject to expiration guidelines in the document or by the state’s statute of limitations and other laws.
Ex: A mortgage might state that it expires 15 years after the maturity date – and then law adds another 18 months for anyone to file an appeal. A federal tax lien might never expire. Other liens may only be valid for 12 months, and so on.
-Ownership-transfer documents such as deeds and wills do not expire. Counties can provide you with a list of document expirations per their state’s statute of limitations. For other laws affecting appeal periods and the like, you would need to consult an attorney.
Are All Property Rights Shown in Documents?
| No. In communal property or spousal rights states, a spouse may have an interest (rights) in a property just by being married. |  |
What Types of Property Rights (Interests) are There?
The U.S. has these and more:
- Deed/Will documents – ownership – as one traditionally thinks. These convey rights.
- Spousal – Spouses have certain rights to real estate even if they are not listed on the deed.
- Use documents – leases to renters, easements to parties for specific/limited uses such as utility companies so they may service their lines/facilities, etc.
- Liens – Give the lienholder the right to stand in line (based on lien seniority) to get paid when a property sells.
- Mineral Rights – Sub-surface rights – Right to access, mine, drill, etc. below the surface.
Defects in The Record and in Documents
Since all documents are prepared, executed, delivered, and recorded by humans, errors are made (defects). Defects may cause lawsuits. To prevent costly legal battles and the resulting loss of the property or financial investment, title searches are typically required prior to transactions by the parties to a transaction: Buyers, sellers, lenders, insurance providers, etc. They want to make sure all valid liens are identified (as much as possible) so they can pay them off in the transaction and to make sure the selling party is, in fact, the true owner and not a fraudster or well-meaning but misguided heir who has no authority to sign the sales documents.
Title Insurance
| Lenders know about title defects so they almost always require a lender’s title insurance policy for each transaction. Owner’s title insurance is optional for any buyer at any time – best to buy it at the time of purchase.
Title insurance protects the insureds from financial loss due to lawsuits from title defects that are discovered – defects that may have occurred way back in history or at any point in the future. Title claims are far more frequent than the public is aware. |
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Conclusion
Title (as related to ownership) cannot transfer to you from the current owner unless past owners have properly transferred ownership from one to another up to & including the current owners – a title search determines this as best as possible –that is called a deed chain.
There cannot be any breaks (defects) in it. Also, since title insurance is required in almost every transaction (purchase or refinance), a title insurance company cannot issue it unless the title has been searched and examined by their title insurance agent (usually a title/escrow company.) So, be sure to have your title searched by a reputable title/escrow company.
Individuals, Foreclosure firms, Tax lien investors, Renewable energy developers, and Commercial real estate attorneys require title search vendors that carry substantial errors & omissions insurance coverage, at least $1Mil, are SOC-1 and SOC-2 certified, or are used by national title insurance companies daily. Title Leader has all these providers in its marketplace to serve you well: Leading national title search vendors, title insurance companies, and title/escrow companies.