Title Terms You Should Know
Access
(v.) The right to enter and leave a tract of land from a public way for a specific purpose, often for a limited period of time.
Acknowledgment
(v.) The act by which a party executing a legal document goes before a notary public or authorized officer to declare the same to be his or her voluntary act.
Affidavit
(n.) A written statement confirmed under oath, usually in front of a notary public or authorized officer.
Assessment
(n.) The valuation of real estate for purpose of taxes or special improvement charges.
Assignee
(n.) A person to whom a transfer or interest is made to by the person holding such rights.
Assignor
(n.) A person whom transfers rights or interest to another individual, the assignee.
Attorney in Fact
(n.) One who holds the right to execute legal documents on one another’s behalf with their full consent which a power of attorney would provide
Chain of Title
(n.) The historical record of ownership transfers of a piece of property, sequential in nature. The chain of title is imperative to determining legal ownership of real estate. Chains of Title are not always perfect.
“Breaks” in a Chain of Title can and do happen. These breaks are not actually breaks in the chain of title, but rather are situations in which certain necessary information, reflecting actual facts, have not been filed for record. Once this information is made part of the land records, the break disappears.
Cloud on Title
(n.) An irregular, possible or unresolved claim that if valid, would adversely affect, invalidate or impair a title to real property.
Examples could include: A mechanic’s lien, unknown heirs, improperly probated wills, or unreleased deeds of trusts.
Collateral
(n.) The asset(s) which are pledged as security for a loan.
Convey
(v.) The act of deeding or transferring title to another.
Conveyance
(n.) The transfer of title to a property from one entity or person to another.
Correction Deed
(n.) A deed drafted and recorded to make changes to an erroneous previously recorded deed.
Deed in Lieu
(n.) An arrangement where an owner voluntarily turns over ownership of a property to their lender to avoid the foreclosure process
Deed Restriction
(n.) Written agreement that restrict, or limit, the use or occupancy of real property including the type, size, purpose and location of improvement to be constructed on the property.
Deed of Trust
(n.) A document representing an agreement between borrower and lender to have the property held in trust by a neutral and independent third party until the loan is paid of.
Due on Sale Clause
(n.) Provision in a mortgage or deed of trust which requires a loan to be paid in full if property is sold or transferred.
Easement
(n.) A right or privilege to use all or part of real property owned by another for a specific purpose. Easements can be private or public.
Examples could include: Driveways or utility access such as sewage, water and power lines
Egress
(n.) The right to exit or leave a place.
Encroachment
(n.) Any improvement or structure located on one property that intrudes upon the property of another including things like walls, fences and driveways.
Buyer’s Tip: When purchasing a home, it is important to understand and know about any encroachments on the property. Without knowing boundary lines in conjunction with a survey, it may not always be obvious.
Encumbrance
(n.) Any claim attached to a parcel of land that constitutes a burden upon the property including unpaid taxes or a lien.
Estoppels
(n.) A legal restraint that stops a person from contradicting on their previous position
Exception
(n.) A provision in a title insurance policy that excludes liability for a specific title defect, outstanding lien or encumbrance.
Foreclosure
(n.) A legal proceeding in which real estate secured by a deed of trust is sold to satisfy the underlying debt.
Leasehold
(n.) The right to possession and use of land for a fixed perios of time.
Lien
(n.) A type of claim attached to a property to secure debts.
Common liens we see consist of mechanic’s liens, property tax liens, and IRS liens. All liens have to be satisfied and released before a transaction can be closed.
Loan Policy
(n.) A title insurance policy protecting a lender’s interest in the property until the mortgage is paid off.
Note
(n.) A written promise to pay a sum of money, usually specified at a started time and specific interest rate to a specific payee
Owner’s Policy
(n.) A title insurance policy protecting a homeowner against losses from potential ownership issues prior to when you bought a property, but weren’t known at the time of purchasing. For example, you could lose title to your property because of fraud, errors or omissions in previous deeds, or forgery of a previous deed.
Plat
(n.) A map dividing a tract of land into lots.
Power of Attorney
(n.) A legal document used to authorize an individual to act on the behalf of another.
Release
(n.) To relieve from debt or abandon a right.
Set Back Lines
(n.) Lines which delineate the required distances of the location of structures in relation to the property.
Subordination
(n.) The act of process by which a person’s rights are ranked below the rights of others.
Title
(n.) The legal right to ownership of a property, including the right to sell.
Title Plant
(n.) Also known as an abstract plant. A geographically filed assemblage of title information that helps in expediting title examinations, such as copies of previous abstracts, tax searches and copies of public records.
Title Search
(v/n.) An examination of public records, laws and court decisions to disclose the current facts surrounding ownership of real property.
Underwriter
(n.) An insurance company that issues insurance policies to the public or to anther insurer.
Zoning
(n.) Laws passed by local government regulating type, size, nature and use of land or buildings