Every description I’ve heard of with a title search makes it seem like an involved process and I’m sure on some properties it can be. But take an ordinary property - 123 Main St., What would be involved beyond heading to the county seat and/or internet and looking up a few records? Maybe there is a mortgage or someone died a few years ago, but I’m sure that those would not overly complicate matters. Likewise common easements like electrical or water lines.
So if I give a title insurance company 123 Main Street to search, what would they physically do and barring Grandpa doin’ something crazy 50 years ago, how long should it take?
It would depend on the land registration system in use. Under one system, and using today’s technology, an accurate title can be pulled in a matter of minutes. Under the other, somebody may need to plow through years of documents (possibly scanned, but possibly still on paper), piecing together exactly what constitutes “title” to a piece of property.
The first, the Torrens system, makes things pretty simple. One of the features of a Torrens system is that, generally speaking, you never need look further back than the title held by the previous owner. That will reflect all existing interests, encumbrances, caveats, liens, mortgages, etc. And if a problem in title somehow does occur, the government (which is in charge of registering title) will make good on the problem through a guarantee.
However, things are different (and more difficult) under a deed registration system. Unlike a Torrens system, which registers title; a deed registration system registers interests and/or instruments (i.e. documents) reflecting those. Wikipedia has a good summary (from the above link):
Emphasis added. This is where time is taken: on the searching of “title” under the deed registration system. Somebody needs to go to the registry office, look up all the instruments registered in relation to a piece of land, figure out what interests exist and who owns/owned them (whether registered or not), and so on. Not all land transfers will involve complicated searches; but some will, and the process can be so time-consuming that there are specialized “title searchers” who do only this for a living.
As you can see, your question is not an easy one to answer. It all hinges on which system your location is using.
Except, AFAIK, most systems are computerized and all pertinent documents are increasingly available online, some free, some for a fee. A “search” consists of a computer query and returns a PDF file of the whole mess, at least it does in my county. Only rarely do you need to physically go to the courthouse and page thru dusty books.
Thanks for the info–I had a feeling things were this way nowadays.
I’m not a title searcher, but I did work with a few occasionally, in a long-ago job. A few times, I actually had to go to the registry office and page through dusty books. Nice to know the process is now a lot cleaner.
I work with title searches only secondarily, as a Realtor. If I need one, I just call up the title company and they send me a PDF file in a day or so, depending on my need and their workload.
I do recall doing it myself before I had access to the title company and today’s online facilities. Our courthouse started out in the 1800’s with big, bound books, switched to microfiche in the 1970’s, then computer databases by 2000. They still have the original books and microfiche if you want to use them.
The old cross-references were poor. I found some errors in the hand-written files, but they declined to fix them. If something was misfiled, you would have to search every record in the vault to find the one you wanted, an impossibility.
They use an interesting filing system. As documents (deeds, mortagages, easements) come to the Registar’s office, they are added to the newest big book in chronological sequence and each page is given a number.
Then the clerk finds an index card with the property’s tax ID number (formerly the address) and enters the Book number and the Page number at the end of the card. So Tax ID 99999 might have entries like this:
Book 345, page 6
Book 678, page 24
That was the entire cross-reference until computers came along. You could find the document as long as you had a tax ID number, or if you found a document in the book, you could go back to the cards and find other docs in other books that related to the property.
And they are now scanning in all the old surveys, adding to the files the new surveyors provide. Again, if you want to see the original, yellowed, paper copies, you can go there and all access is free.
In our county, access to all online data would be free except for the state’s requirement that the Registrar of Deeds charge for certain copies, and they can’t override that. But it makes the online access difficult, since you have to provide a credit card before you can see anything from their office.
Which leads to some oddities. All ordinary surveys are available to the public, free, online, and the source is the “Real Property Listing” Department. But “certified” surveys, which the state requires be filed with the Registrar, cannot be accessed free, and they charge $2 for the first copy whether you print it out yourself or get one at the courthouse. Sometimes it’s the same survey with a “CSM” stamped on it.
I don’t know the full story, maybe the guy was just trying to run up a bill or something. (But we paid a flat fee!) Anyway …
For one place we bought, our lawyer found out that an earlier owner had a name quite similar to mine. After selling the place, this other guy declared bankruptcy. Our lawyer went thru a thing to get the seller’s lawyer to track down the other guy and get a notarized letter saying that the guy wasn’t me, etc. This was supposedly intended to protect us, since our lawyer thought we might have trouble selling if the next buyer’s lawyer decided to get fussy.
We were baffled. Why would someone with not actually the same name going bankrupt after selling a place make anybody worried? So we had to wait a few hours while the paperwork was generated.
This was part of the title search the lawyer did. So, for some lawyers it’s more than just what’s in the deed books.
If there were any “non-standard” transfers in the properties past, a lawyer will do a little digging to make sure no one ever tried to make a deal out of it. E.g., if the owner died and it went to probate, taken for back taxes, etc. So other court records might be checked.
I was a title searcher/abstractor for a few years. It’s been a while, but basically the procedure was as follows:
Identify the property. Generally this means searching the tax records based on a combination of the owner’s name and the property address. The tax records will provide you with a map reference and a simplified legal description of the property, which might be a platted lot in some subdivision or acreage in some particular survey or section town and range. They also provide–a-ha!–the tax records, which I noted as well, indicating any delinquencies or special assessments.
Search the property. This is the meat of the title search; the specific procedures varied from county to county. As I recall, all of the counties I regularly worked in had a geographical index. With this, I’d take the legal description that I’d pulled from the tax records and make notes of all of the instruments (deeds, mortgages, easements, etc.) associated with it. Depending on whether the search was for a sale or refi, I’d search back forty-two or ten years, the statutes of limitations for adverse possession and judgment liens, respectively. If it was a platted lot for all of that time, this was quick and easy. If it had either been platted during that period or was acreage, things could get more complicated and I would have to rely more on the parties’ names to do the search.
Inspect the instruments. Once I had my list of documents, I’d pull them and look at each one to make sure that it wasn’t obviously deficient in some way–wrong name, wrong reference, bad legal description, etc. I’d also check to make sure the mortgages had been properly released. Generally this involved sitting for hours at a microfilm or fiche machine, but computers were becoming more prevalent for more recent info and for the old stuff, there were still books. Once I was done, I’d note the current title holder and any mortgages.
Search for liens, judgments, and bankruptcies. Not much to say here–I’d run names back the appropriate amount of time to find any liens of record and note them as well.
Get a copy of the plat or tax map and note any restrictions. Easements and setbacks are often noted on plat maps.
That’s about it. Wasn’t a bad job, and it wound me up where I am today, in a roundabout manner, so I can’t really complain!
Judgments do not have to be recorded (or “registered” depending upon the jurisdiction) to be a lien. It is true that many lawyers do record a “memorandum of judgment,” but the court records are also official public records which the public must take notice of. On the other hand, a suit affecting real estate may be filed, but a “lis pendens” notice must be recorded to give public notice.
Recording instruments gives constructive notices, the same as possession, of which all buyers must take note of. You obviously cannot buy property without inspecting it - for obvious defects, easements, but also who is in possession.
Let me digress for a moment. The Torrens system (in Canada) is not now used by any state in the US, AFAIK. Illinois did allow any county to use it, and Cook Co. did, but abolished it about 10-15 years ago.
Now for the hidden defects. No thorough search of the records would disclose any forgery. And if a grantor describes his marital status as “never married,” but actually has a spouse, the deed would not waive homestead rights or the dower rights of the spouse. If the grantor has a common name, in any large county there would be judgments against a person with that name. Hence, an affidavit is necessary that the grantor is not the same as the debtor.
Title companies must not only search the land records, but also the tax records, and the records of all the courts in the county. They have personnel going through all the docket books every morning for judgments, which are duly noted.
Some title companies use “geographical indexes” but others (such as CT&T Co) use tract books. Or at least they did up to about 1980. I haven’t kept up with what they do since then, but with the advent of computers, I don’t now know. Nonetheless, the official record in Cook County is not the tract books (which the county also maintains or did maintain) but the grantor-grantee index. Obviously, as a practical matter, that is unworkable for a large county, such as Cook.
I’ve done property research, and I’ve also bought property.
Typically, to obtain a mortgage, the lender usually required Title Insurance. This is the bread and butter for Title companies. It’s usually the low-man-on-the-totem-pole grunt work, because of the massive amount of paper shuffling that needs to be done. These days, a lot of stuff is scanned and placed in searchable databases. That HELPS. But if there’s any question, you often have to trace the title all the way back to when God created the Heavens and the Earth. I’ve seen streets magically change from one side of a centerline to another, and I had to dig back over a hundred years to when the street was originally created. I’ve also had to find out when a street was created so I could know how WIDE the stupid thing was. The underlying ownership of the street is sorta important, too.
Title Insurance is supposed to be a wager that the Title company has found everything that could impact the ownership of the property, and that the property is as described, with no other “clouds” to the title. Clouds would be things like unpaid mortgages, back taxes, a dispute over a will, or a lien against the property for remodeling.
Title companies do NOT like to pay out for any claim against the Title Insurance. They have a very detailed, finely-printed set of conditions for their insurance services, and it’s difficult to dot all the “i’s” and cross all the “t’s” to get them to fork over the cash.
Title research is incredibly fascinating. It can also be quite time consuming. Word of warning, though: if you are buying property, you really should think about getting Title Insurance. For all the detailed research done by a non-professional, there’s always enough stuff lurking around that you could miss, and you can be badly burned.
~VOW
I’ve never handled a transaction where the Buyer refused title insurance. It is written into the standard purchase offer language, and would have to be opted-out if not wanted.
It is possible to obtain title insurance here, but unlike your buyers, most people here refuse it. As you may have guessed, we use the Torrens system; and between the government’s guarantee under that and the need for real property reports in transfers, most mortgagees and buyers are reassured that their title will be clear. So, very few buyers buy title insurance.
I’m intrigued by your earlier comments, as well as those of VOW and barbitu8 that refer to “title companies.” I’m unsure if I quite understand what they’re referring to, though. It sounds as if title is registered with a private company, not a governmental authority. Is this correct?
No, our “title companies” are firms that broker title insurance (they may have their own underwriters, or handle insurance from outside companies, much like car or auto insurance).
But they also handle the entire real estate title transfer process, starting when a real estate brokerage supplies an accepted offer. They will (on request, and sometimes for a nominal fee) order the requested tests (water, sanitary, inspections, surveys, etc.) and help move the transaction along, checking off contingencies as they are met. They will prepare a final statement of charges & credits to both buyer and seller, and facilitate loan paperwork. Finally, they will handle the closing process and file the transfer documents with the county, the needed docs with the IRS, the state, etc.
In some states, this is handled by what is called an “Escrow” company, but the functions are the same.
How do they get paid? Besides the nominal fees for service, they share in the proceeds for the title insurance. It must be very lucrative, as we real estate brokers are constantly courted by the local title firms, especially at Christmas time!
Ah, thank you. Most transfers here (indeed, across Canada, regardless of system) are handled by lawyers. The lawyer does much of what you describe (charges and credits, mortgage paperwork, final signings), though buyers generally arrange for their own inspections, surveys, mortgage, etc.; and the realtor and/or the lawyer usually has some recommendations for all of the above. (As a lawyer, I should state that with lawyers, there are no kickbacks from recommended third parties.) Funds pass through the lawyer’s trust account, much like escrow, and the lawyer looks after title registration. In short, it sounds like your title companies fulfill the same duties as our real estate lawyers.
Not quite. Title companies do not broker insurance like auto insurance. In fact, they prefer to call themselves “guarantee” companies, in that they don’t just merely fork over money in the event of a claim, but first must defend the title. An example of that, and just one of many, is the Prudential building in Chicago. CT&T insured the title in Prudential from a deed from the IC Rrld. The problem was that the IC merely acquired an easement from the state of Illinois, not the unconditional fee simple. To make a long story short, the Ill Sup Ct held estoppel against the state and the City because they treated the land as being owned by Prudential. (The only time estoppel has been applied to a governmental body.) (The action was originally brought by a private citizen, but the state and the city joined in.)
Title companies initially went back to the original patent from the federal government, usually to veterans of the Revolutionary war. Those parcels that were not granted (patented) remain in the federal government, except a state acquired title of the land comprising the lands of the state. State agencies, such as the School Trustees (section 16 of each township was designated a “school section”) and the Canal Trustee Commissioners, subdivided the lands and sold them to developers. The Original Town of Chicago was subdivided by the Canal Commissioners.
However, title companies kept tract records of all the lands and had on file the ownerships of large tracts of land before they were further developed and/or subdivided. Hence, if a title policy was issued on one lot, the company had a record as to the title to the underlying metes and bounds description, as well as to the entire subdivision. They only had to go back to that date.
Ten years is way too insufficient for a title search. In the first place, a judgement against a person is a lien on land which the person owned at the time of the judgment, and that lien runs with the land. So even after it is conveyed, the lien remains. In Illinois, the lien was good for 7 years, but could be renewed twice, for a total of 21 years.
Although the escrow above described can be done by a title company, that is an entire separate feature. It has nothing to do with title “insurance.” Mortgage companies usually request that the funds be deposited in escrow with the title company. But title companies go further. In the event of a construction loan, where there will be mechanics’ liens, the title companies will exam the waivers each month to ensure that all contractors, sub-contractors, and laborers have been paid and/or waived their rights to liens. (Mechanics’ liens is another animal that doesn’t have to be recorded to be a lien.)
I don’t have the time now to describe ownership of streets. Suffice it to say that before the Plat Act was enacted in Illinois (around the time of the laying out of the OT of Chicago), title to the streets remained in the adjoining owners, and the municipality got only an easement. The Plact Act bestowed title to the municipality. However, since it was contra to common law, it had to be strictly followed. In a famous case in downtown Chicago, one school commissioner did not sign the plat, and in another, the surveyor did not affix his seal (a canal commissioner’s subdividsion, IIRC). In one case, the Illinois SC held that the failure to sign was fatal, and title remained in the adjoining owner. In the other case, it held that it was not and that the city retained ownership. The street in the former was Monroe St., and the owner the First National Bank of Chicago. To this date, the bank maintains vaults underneath Monroe Street and overpasses over the street. In all other downtown streets, the adjoining owners must pay rental for the same usage. (Since the city has only an easement in the street, the owner can make any use that doesn’t interfere with the easement.)
One other point while I’m here. The USA was not the only country claiming title to certain lands. The French and Spanish governments had claims to come portions, and those governments, in some cases, conveyed the lands to their citizens. One that I’m aware of is in central Illinois, where French citizens claimed title, but the government issued grants to Americans, too. Settlements had to be made then (no pun intended). But that’s ancient history and before title companies came into existence.
Yes, Wisconsin title companies do, but are cheaper than attorneys for the simple paperwork. Attorneys are brought in only for complicated situations, and attorneys are hired to prepare the deed (which consists of the secretary pasting some text in a template for $75). Of course, any seller or buyer can hire their own attorneys at their own expense to check the work or perform specific tasks, but most property transfers are pretty straightforward. It’s just a ton of paperwork (and computerwork) handled by quasi-legal, trained personnel.
Barbitu8, I think there may be some small differences between our states. Wisconsin’s title companies, the offices that real estate agents interface with, are very small local offices, locally owned. They provide most services in house and/or locally, but represent large, outside firms of underwriters who provide the actual title policy that plays a central part in a real estate transaction.
In this manner, they are similar to my State Farm agent’s office, locally owned, but representing a large, outside firm that writes the actual policies.
barbitu8, I loved the stories of Chicago’s streets. That’s the kind of information I eat up with a spoon.
I retired after twenty years with the State of California, Department of Transportation. You and I could probably sit down with a pot of coffee over my kitchen table and swap “war stories” about title companies, deed research, surveyors’ notes, plat maps and trying to explain things to people with no engineering background. Private streets, public right-of-ways, abandonment, and most of all, conflicting records.
Colonial land states versus Public Land Survey System–gotta love it! I never knew how much I appreciated strip descriptions until I worked in Kentucky and was told, “EVERYTHING has to be metes and bounds!”
~VOW
Name the date. I don’t have any engineering background, but did work for CT&T Co for 30 years before I went over to SSA.
Musicat, Chicago is the home office of CT&T Co, the country’s largest title company next to TICOR. It has immense office space. When I worked there, it was in its own downtown building at Clark and Madison, across from the courthouse, which made it easy for its own personnel to go to the courthouse to check the records. It occupied the first six floors of the building, but had a basement and sub-basement filled with “abstract books,” which are copy presses of original documents recorded in the Recorder’s Office (across the street). (Talk about musty places.) I suppose those are all now scanned.
CT&T Co began in the 19th century, before the Chicago fire. In fact, the county had to get copies of burned documents from CT&T Co. As a result, it has relied on the tract book method of searching parcels of land. New title companies use a “geographical index,” which is really immensely simpler. In Illinois, however, the grantor-grantee index is the official record, but that is too cumbersome to search titles doing that method. It also has an Escrow department, which department is devoted just to escrow.
Downstate, title insurance did not get a good grip until about 1970-1980. Counties downstate have abstract companies, and attorneys were hired to examine an abstract composed by the abstract company. For the most part, those abstracts were also copies of letter presses. However, title insurance began to get a good foothold downstate. CT&T Co set up regional offices to examine property in downstate counties. (I was the regional manager of the Peoria office for a few years.) That regional office would send an attorney employee to the abstract company to examine the abstract and issue a letter of opinion. A title company always issues a letter of opinion first, which sets forth the title with all the defects. This gives the seller an opportunity to clear those defects if the purchaser is unwilling to accept them. Then, a “later date” will take place, and the policy issued.
The advantage of a title policy as opposed to an attorney’s opinion is that the policy has the resources of a company. (Note the above Prudential case which I noted. I did forget to mention that Prudential bought the air rights from IC - but IC, having just an easement, did not have title to the air rights. Other downtown cases that went to the Ill Supreme Court involve the buildings in Grant Park, such as the Field Museum and the Art Institute. The properties facing Michigan Ave were given an easement for clear vision to the Lake, which those buildings obstructed. One of those cases went all the way to SCOTUS.)
BTW, the deed to the IC stated that the property was “for railroad purposes.” The Court deemed that an easement only, but it sounds to me as if it were a condition subsequent. It makes no difference because it could not be used for anything but a railroad. The CT&T Co examiner missed that somehow.
I forgot to mention that downstate attorneys were not anxious for their clients to obtain title policies in lieu of their opinions, as it cut into their charges. I never could understand that logic because examining title is a detailed and laborious chore; the time examining title could be more profitably spent doing other legal work.
Not that it is of any importance, but the CT&T Co building was actually located at Clark and Washington. It removed to one of those new buildings near the River and Wabash in the 1980s. Also, I was manager of the Springfield office, but I also worked in Peoria. I now live in the Holy City (Charleston, SC).