chapter 6 ________________ recordation, abstracts, and title insurance

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Chapter 6________________Recordation, Abstracts, and Title Insurance

© 2010 by Cengage Learning

Public RecordsConstructive Notice –

recording documents.Actual Notice – knowledge

based on what one has seen, heard, read, or otherwise observed.

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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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© 2010 by Cengage Learning

Chain of Title

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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 ProofAbstract of TitleTitle Insurance

Title commitmentPolicy premiumsLender’s policy Claims for losses

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Title InsuranceThe 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.

© 2010 by Cengage Learning

© 2010 by Cengage Learning

The Torrens SystemA 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 TitleMarketable title is one free from

reasonable doubt as to who the owner is.

Marketable Title Act – 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