Examination of Title

What is Examination of Title?

An Examination of Title involves a legal professional or a title company reviewing the history and current status of a property’s title. Unlike a full title search, which provides a comprehensive analysis going back multiple years, an examination of title often concentrates on the most recent records. The purpose is to confirm ownership, identify any outstanding liens, encumbrances, or title defects, and ensure that the deed can be legally transferred to a new owner without issue.

Key Aspects of an Examination of Title:

Verification of Ownership: Confirming the current legal owner of the property.
Identification of Liens: Checking for any unpaid debts attached to the property that need to be settled.
Encumbrance Checks: Identifying any easements, rights-of-way, or restrictions that may affect the property.
Title Defects: Examination to ensure there are no errors or disputes in the historical records that could affect ownership rights.

Examples

Residential Property Sale: Lisa is purchasing a house. Before finalizing the sale, her lawyer conducts an examination of title. Since the property was sold last year and underwent a full title search then, the lawyer focuses only on changes since that search. This helps confirm there are no new liens or disputes affecting the property.
Commercial Building Transaction: A company is buying an office building that had a detailed title search performed two years ago. The legal team opts for an examination of title to save on time and costs. They find no new issues, reaffirming the title is clear for the transaction.

Frequently Asked Questions (FAQs)

What is the difference between an Examination of Title and a Title Search?

Examination of Title: Focuses primarily on recent property records and is a less thorough review.
Title Search: Involves an in-depth review of all historical property records to establish a clear chain of title.

Why would someone choose an Examination of Title over a Title Search?

Cost and Time: An Examination of Title is often faster and less costly than a full title search, making it suitable for recent transactions where the history has already been scrutinized.

Are there risks associated with opting for an Examination of Title?

Dependence on Recent History: Since this method focuses on recent records, it may miss older issues not discovered in a previous search, potentially leaving underlying title defects unnoticed.

How often should a full Title Search be conducted?

Ideally, a full Title Search should be done at least once for significant property transactions. Subsequent transactions within a short period might only require an Examination of Title.

Do I need title insurance with an Examination of Title?

Yes, title insurance provides protection against potential defects that may not be detected through an Examination of Title alone.

Title Search: A comprehensive analysis of a property’s historical records to confirm ownership and identify any issues that may affect the title.
Title Insurance: A policy that protects property owners and lenders against losses resulting from title defects or undisclosed encumbrances.
Chain of Title: The chronological sequence of historical transfers of title to a property.
Encumbrance: A claim, lien, charge, or liability attached to and binding real property.
Lien: A legal right or interest that a lender or creditor has in the borrower’s property, typically lasting until the debt is satisfied.

Online Resources

References

ALTA. “What Is Title Insurance and Why Do I Need It?” American Land Title Association. Link to resource.
NAR. “Understanding Property Titles and Title Insurance.” National Association of Realtors.
Legal Information Institute, Cornell Law School.

Suggested Books for Further Studies

“Real Estate Law” by Marianne M. Jennings
“Practical Real Estate Law” by Daniel F. Hinkel
“Title Insurance: A Comprehensive Overview” by James L. Gosdin

Real Estate Basics: Examination of Title Fundamentals Quiz

### What is the primary focus of an Examination of Title? - [ ] In-depth analysis of all historical records - [ ] Determining the property's market value - [x] Recent historical records and outstanding issues - [ ] Performing an environmental survey > **Explanation:** An Examination of Title primarily focuses on recent historical records and current issues affecting the property to save time and cost compared to a full title search. ### What is one of the key differences between an Examination of Title and a Title Search? - [ ] Title Search is faster - [x] Examination of Title is less thorough - [ ] Examination of Title is more expensive - [ ] No significant difference > **Explanation:** An Examination of Title is less thorough as it usually concentrates on recent records, while a Title Search involves a comprehensive review of all historical property records. ### Why might a property owner choose an Examination of Title? - [x] To save on time and costs after a recent, thorough Title Search - [ ] To avoid verifying current ownership - [ ] To find the property's market value - [ ] To handle property insurance issues > **Explanation:** An Examination of Title is often chosen to save on time and costs, especially if the property has undergone recent thorough Title Searches. ### What are potential risks of relying solely on an Examination of Title? - [ ] Identifying lien claims - [ ] Ensuring title insurance policy coverage - [x] Missing older title defects - [ ] Confirming the property's physical boundaries > **Explanation:** Since an Examination of Title focuses more on recent records, it may overlook older title defects not identified in previous searches, thereby posing potential risk. ### In what situation would an Examination of Title be especially suitable? - [ ] For very old properties with extensive histories - [ ] When transferring family-owned properties - [x] After a recent and comprehensive Title Search - [ ] For vacant land transactions > **Explanation:** An Examination of Title is especially suitable when the property underwent a recent comprehensive Title Search, reaffirming newer transactions or reviews. ### How often should a full Title Search be conducted? - [x] At least once for significant transactions - [ ] Monthly - [ ] Every 5 years - [ ] It is rarely necessary > **Explanation:** A full Title Search should be conducted at least once for significant property transactions to ensure a clear chain of title and identify potential defects. ### Who typically performs an Examination of Title? - [ ] Real estate agents - [x] Legal professionals or title companies - [ ] Mortgage lenders - [ ] Insurance underwriters > **Explanation:** Examination of Title is typically performed by legal professionals or title companies to confirm ownership and identify any current liens or encumbrances. ### What does title insurance provide in relation to an Examination of Title? - [ ] Market value estimation - [ ] Environmental compliance - [x] Protection against undiscovered title defects - [ ] Property appraisal adjustments > **Explanation:** Title insurance provides protection against potential undiscovered title defects that may not be identified during an Examination of Title. ### What is a lien in the context of title examinations? - [ ] A part of the property's boundary - [ ] A method of transferring ownership - [x] A creditor's claim against the property - [ ] A type of title insurance > **Explanation:** A lien is a legal right or interest that a creditor has in the borrower’s property, indicating a claim that needs to be satisfied. ### What historical aspect of a property is primarily checked during an Examination of Title? - [ ] Local market trends - [ ] Future development plans - [ ] Environmental compliance - [x] Recent ownership records and encumbrances > **Explanation:** During an Examination of Title, recent ownership records and encumbrances are primarily checked to ensure there are no significant issues affecting property transfer.