Definition of "Abstract of title"

Cheryl Landwehr real estate agent
Cheryl Landwehr, Real Estate Agent Smith & Associates Real Estate

The term’s abstract of title definition is the recorded summary of a property’s history. Abstracts of title can be used to determine former and present ownerships of any significant assets, including expensive jewelry, paintings, or other types of significant assets. Still, they are most commonly used for the ownership of properties. The abstract of title, besides the ownership title, includes evidence of titles, such as maps, plots, and other aids. It applies to all conveyances, including mortgages, deeds, judgments, liens, charges, estates, or other liabilities to which the land may be subject. An abstractor also provides a certification that states that the history of the asset is complete and accurate.

What is an Abstract of Title in Real Estate?

If you’re a property owner, you might find among the property’s documents an abstract of title. Naturally, your next question would be: What is an abstract of title?

Imagine having an old Christmas decoration that you received from a friend, and that friend received it from someone else and so on going back a century. Next to it, you have a list of every owner of that Christmas decoration. That is an easy example of what an abstract of title is. In other words, it is a condensed history for the ownership of a piece of land, property, or real estate. It usually starts from the original grant and mentioned every subsequent owner of the title.

What is an Abstract of Title used for?

This chronological overview of legal documentations related to a property or asset is used to prove accurate ownership of the property or asset. Without the abstract of title, ownership can be contested and lost.

For example, John purchases the property from Michael without an abstract of title received from the seller or available from the county recorder. Without the record of ownership, the property is liable to contest. Let’s say Michael also bought the property from someone else, without the abstract of title. In the meantime, someone else, a person that Michael never met, has the abstract of title and with it can prove real ownership because the purchase was property recorded in the abstract of title. With an abstract of title, this person can claim ownership of the property, and John loses any right of claim.

Because of their importance and their cost, many owners deposit abstracts of title in safe deposit boxes, like that they are safe from loss, theft, or damage.

In case the abstract of title is unavailable, the property should not be purchased until the situation is resolved. An owner can replace an abstract of title. All they have to do is get in touch with a title company or the county recorder that has jurisdiction over the area to recreate or obtain the abstract. Municipal agencies record and research title histories as transactions of property are reported to the county recorder.

What is used instead of Abstracts of Title?

In California, for example, abstracts of title aren’t formally used. To replace them when a property transaction begins, a title company analyses the property’s title and gives a Title Report. The title report doesn’t clear the title of the property but gives the new owner the possibility to buy title insurance.

The abstract of title is used to prove the complete and accurate ownership of a property. However, some owners want more protection, and that’s why title insurance was created. This is less expensive than an abstract of title as it is based on the title report and works to ensure the defense of the title. The abstract of title is the most important document that proves ownership.

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