A chain of title is an official record that documents the ownership of a property or asset. The chain of title gets its name from its sequential nature as it captures a list of successive owners of a piece of real estate, starting from the original owner who is often some government who transferred the title as a grant, all the way down to the person who currently has the title to the land. The chain of title traces the history of title transfers from one owner to another until it gets to the current owner of the property.
The term is most often used the context of real estate but chains of title are also applied in such fields as music and film that involve intellectual property. In addition, chains of title are found in fields dealing with intangible property, such as timber or farming rights.
As a result of the extremely important role of the chain of title in establishing ownership of an asset or property, accurate and rigorous title records would normally be maintained by a centralised system or registry.
Abstractors or title companies are the professionals who undertake the task of searching out the chain of title and produce a report in order to assure a buyer that the title in question is free of any claims. Normally, in a real estate transaction, the buyer would have the chain of title researched on his or her behalf by a title company. This is aimed at providing a summary of all encumbrances and title transfers in a title report. In many cases, the trail would lead back to a previous century, show changes to the piece of real estate or its surroundings, or alterations of a domicile. The buyer would need a title insurance in order to protect against the incidence of financial loss which may occur as a result of errors in the title report.
An individual must have adequate knowledge of who the owner of a property or asset was at any particular point in time in order to prove that the title to the piece of real estate is marketable and is free to transfer. It is also crucial that the seller be aware of how each person got to enter into the chain of title.
Chains of titles include foreclosures, notations of deeds, certificates of demise of a joint tenant, judgements of quiet title, judgements of distribution from estates, and other recorded conveyances or transfers of title to property.
Documents showing the chain of title include affidavits, judgements in lawsuits over title, deeds, and other such documents which point to changes in ownership. These documents preserve and maintain the chain of title and are usually submitted to the county “recorder of deeds” or a registry office.
An issue can arise with a chain of title in a situation whereby there are questions about how the title came to be passed from one owner to another. Another possible issue is when two purchasers are in a dispute about who purchased the property before the other, or when it cannot be ascertained whether a title is actually marketable. In some cases, it would be found that the individual posing as the owner of the property did not have a legitimate claim on the property in the first place. Also, a title may be defective in that its validity or that of a deed is in question and yet to be verified, or a wild deed may surface whereby another party presents a deed that is not inside the chain of title.
One of the most common disputes over the chain of title occurs when a person contracts to buy a piece of real estate, but a third party surfaces and claims the property as their own. In such a scenario, the third party would likely claim that the asset was transferred to them from a previous owner through a different sale or a will. To verify the authenticity of the third party’s claim, a title search would be conducted. As a rule, the party with a recorded deed will prevail over another who puts forward a claim without having a recorded deed.
Disputes may arise if both parties are not from the same state or area, as the rules for recording transfers of real estate as captured in a state’s recording acts would differ from one state to another. Recording real estate documents is a crucial aspect of transactions in the real estate industry.
The chain of title in the film industry refers to a series of documentation establishing proprietary rights in a film. It also exists in other fields in reference to compilations where materials have been culled from multiple sources, or numerous persons have contributed to a project and consequently acquired authorship rights. In these context, chain of title documentation may include trademark clearances, copyright clearances on music or footage of other films, talent agreements including a legal release, omission insurance and proof of errors.
Within the real estate context, title is a comprehensive term that refers to the legal basis of ownership of property, extending to both personal property and real property. It is also a term referring to a document that serves as evidence of ownership of property.
An abstract of title consists of a compressed history of the title of a piece of real estate as well as a summary of conveyances. To permit the title to the piece of real estate to be checked, this history will be included in public records.
Conveyance may refer to the act of transferring ownership of property from one party to another. The term is also used in reference to a written instrument such as a lease or deed that transfers legal title of a property from a seller to a buyer.
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