What Does Title Search Cover and How the Title Search is Performed?
This is the part#3 of a series of documents regarding Title Insurance.
Deeds establish chain-of-title, but sometimes those chains are broken. In addition, title searchers also look for reconveyances (proof that the encumbrances are paid off), and they look for easements, rights-of-way, CC&Rs, other elements affecting title to the property.
Title companies search the public records to determine if there are title problems that must be resolved before they purchase a property. Examples of searches are: chain-of-title, reconveyances, easements, CC&Rs, other elements affecting title to the property,
Chain of Title Search
A complete history of instruments used to transfer ownership in a piece of property from the U. S. Patent to the last record owner. Chain-of-Title breaks when a deed in the chain is missing. A sample chain-of-title would look like this:
First Owner, grantor, >> Second Owner, grantee
Second Owner, grantor >> Third Owner, grantee
Third Owner, grantor >> Forth Owner, grantee
Forth Owner, grantor >> Present Owner, grantee
- Title searches start with the most recent deed, searching the grantee's name (the person now holding title) backwards in time, until the deed when the grantee acquired the property is located.
- That grantor's name is then searched backwards in time in the grantee's book to find when the grantor acquired title as a grantee.
- This process continues, eventually, the searcher finds the U. S. Patent.
4.If a title searcher could not locate the deed from one Owner to another Owner, the chain-of-title would be broken. The most common cause of this found among people that their last name has changed due to Marriage, Divorce, Court Order, etc.
RECONVENANCE DEED: (proof that the encumbrances are paid off)
A RECONVENANCE DEED is used in conjunction with a Trust Deed, its purpose is to clear the title of any liens pertaining to the note and trust deed. Once the Borrower (TRUSTOR) makes all appropriate payments to the Lender (BENEFICIARY) and pays off the loan, then the Lender (BENEFICIARY) signs a request of RECONVENANCE to the TRUSTEE and the TRUSTEE will issue a RECONVENANCE DEED to the Borrower (TRUSTOR).
ENCUMBRANCE:When the preliminary title report reveals the existence of an easement on the property, it indicates that easement is an ENCUMBRANCE. Remember that an encumbrance is any claim against a property. Restrictions, liens, and buyer's claims (also known as a vendee's lien) are all FORMS of encumbrances.
CC&R: (COVENANTS, CONDITIONS, AND RESTRICTIONS)
A term used in some areas to describe the restrictive limitations which may be placed on A term used in some areas to describe the restrictive limitations which may be placed on property. In some areas, simply is called restrictions.
EASEMENTS: Easements grant only access, not ownership, use or occupancy rights. Further, that access is generally for the benefit of the property owner, such as maintaining utilities or sidewalks. As such, they "attach" to a deed or lease and remain in effect, until specifically lifted.
The Location of the easement need NOT be specified.
Other Factors Affecting Title
Here are more records that are searched to piece title together:
- Marriage records
- Death certificates
- Tax sales