Resources

Title Definitions

Deeds

Deed:

A written instrument by which some degree of ownership interest in real estate is transferred from the grantor to a grantee. Deeds must meet certain legal requirements in order to be effective.

Deed-In-Lieu of Foreclosure:

A deed given by a mortgagor to the mortgagee to satisfy a debt and avoid foreclosure.

Quit Claim Deed:

A deed given by the grantor to disclaim any interest the grantor may have in a piece of real estate and pass that claim to the grantee.

Sheriff’s Deed:

A deed given when property is sold by a court order to satisfy a judgment for money or for foreclosure of a mortgage. The giving of said deed begins a statutory redemption period.

Special Warranty Deed:

A deed in which the grantor warrants, or guarantees the title only against defects arising during the period of his ownership of the property. A special warranty deed does not warrant against defects existing before that time.

Trustee’s Deed:

An instrument in which a titleholder trustee conveys title to real estate (not to be confused with a Deed of Trust).

Warranty Deed:

A deed which conveys title and in which the grantor warrants (guarantees) that the title conveyed is valid, that there are no liens, mortgages, etc. other than those disclosed and that the grantee will have the right to an undisturbed possession of the property.

Method of Ownership

Fee Simple:

n. absolute title to land, free of any other claims against the title, which one can sell or pass to another by will or inheritance.<

Joint Tenancy:

An equal undivided ownership of property b y two or more persons. The interest must be equal, occurring under the same conveyance and beginning at the same time. Upon the death of a joint tenant, their interest passes to the surviving joint tenant(s) rather than to the heirs of the deceased.

Life Estate:

An interest in real property which lasts only for the term of the life or lives of one or more persons. The estate then reverts back to the grantor or on to a third party.

Tenancy by Entirety:

A method of co-ownership which is available only between a husband and wife and only for their homestead property. Property owned in tenancy by the entirety is protected from the claims of certain creditors.

Tenancy in Common:

A form of concurrent ownership where two or more persons hold separate titles in the same estate which need not be equal. There is no right of survivorship with tenancy in common. If one tenant dies, his or her undivided interest in the estate passes to his or her heirs rather than to the remaining tenants in common.

Estate / Trust

Administrator:

A person appointed by the court to handle the estate of someone who died without a will.

Beneficiary:

The person designated to receive the income on principal from a trust or estate.

Devise:

Transferring title to real property by means of a will.

Executor:

A person named in a will to administer an estate. The court will appoint an administrator if no executor is named.

Fiduciary:

A person granted the power and obligation to act for another person under circumstances that require total trust, good faith and honesty. Examples include trustees, executors and administrators.

Heir:

A person who succeeds to the ownership of real estate upon the death of the current owner. The identity of who constitutes a person’s heirs is established by state law.

Intestate:

To die without leaving a valid will so that the property of the estate passes by the laws of succession rather than by direction of the deceased.

Probate:

A court proceeding in which the property of a deceased person is administered for the purpose of paying the decedent’s creditors and distributing the remaining estate either in accordance with the deceased’s will or, if the decedent left no will, to his heirs in accordance with state law.

Testate:

To die having left a valid will.

Trustee:

The entity holding legal title to property that is held in a trust.

Security Instruments

Deed of Trust:

Used in place of a mortgage. Property is transferred to a trustee by the borrower in favor of the lender. (not to be confused with a Trustee’s Deed)

Financing Statement (UCC):

Under the Uniform Commercial Code, this is a prescribed form filed by a lender with the recorder of deeds and/or secretary of state to perfect a security interest in personal property.

Mortgage:

A document in which the owner pledges his/her/its title to real property to a lender as security for a loan described in a promissory note.

Title Exceptions

Adverse Possession:

A means to acquire title to land through obvious occupancy of the land, while claiming ownership for the period of years set by the law of the state where the property exists.

Clear Title:

Title which is not encumbered or burdened with defects.

Cloud on Title:

Any claim or condition (valid or invalid), which adversely affects the title to a property. Generally, these cannot be removed except by a quit claim deed, release or court action.

Commitment (Title):

The initial product delivered by a title company which reports the status of title as a specific date. It is called a commitment because the company is committing to issue a title insurance policy that conforms with its provisions.

Common Areas:

Those portions of a building, land, and amenities owned or managed by a PUD or Condominium Project’s Owner’s Association that are used by all of the unit owners. Common areas include swimming pools, tennis courts, other recreational facilities, corridors of buildings, parking areas, means of ingress and egress, etc.

Contiguous:

Adjoining or touching.

Covenants, Conditions and Restrictions CC and R:

Constraints in a deed or other recorded document, which delineate the uses to which the land may be put and the penalties for failure to comply. CC and R’s will often be used by land developers when the property is subdivided and platted. It may restrict the size, price range, location, character and other features of buildings which may be constructed there. The covenants are said to “run with the land,” meaning that they will be binding on future owners of the property.

Easement:

Right of interest in land owned by another entitling the holder to a specific limited use, privilege, or benefit such as laying a sewer, putting in electric power lines or crossing the property.

Encumbrance:

A claim, lien, charge or liability attached to and binding real property, such as a mortgage, lease, easement, or restriction.

Common Areas:

Those portions of a building, land, and amenities owned or managed by a PUD or Condominium Project’s Owner’s Association that are used by all of the unit owners. Common areas include swimming pools, tennis courts, other recreational facilities, corridors of buildings, parking areas, means of ingress and egress, etc.

Homestead Property:

Land that is owned and occupied as a primary residence.

Indemnify:

Reimburse. In an indemnity agreement, one party agrees to repay another for any loss or damage suffered by that party.

Ingress and Egress:

A right to enter upon and pass through land.

Loan Policy:

A title insurance policy insuring a mortgagee (and their assignees) against loss caused by invalid title in the borrower, or loss of priority of the mortgage.

Marketable Title:

A marketable title is one that may be completely clear or have only minor objections that would not jeopardize the validity of the lien, and that a well-informed and prudent buyer of real estate would accept.

Mortgagee:

The person or business making a loan that is secured by the real property of the person (mortgagor) who owes the money.

Mortgagor:

The person who has borrowed money and pledged his/her real property as security for the money provided by the lender (mortgagee).

Owner’s Title Policy:

A policy insuring the owner of real estate rather than a lienholder.

Plat:

A map showing a parcel of land subdivided into lots and blocks, streets and easements.

Priority:

That which comes first in time or importance and so has precedence over other claims. Priority is usually established with regard to real property by the date of filing or recording a document rather than by the date of on which the document was executed.

Redemption Period:

In the context of a foreclosure proceeding or tax sale, the time period established by state law within with an owner must fully pay a judgment so that he may retain title to the real estate.

Riparian Rights:

A legal right of a landowner who owns the land next to a natural watercourse to reasonable use of whatever water flows past the property.

Title:

Evidence of the right to or ownership in property.

Miscellaneous

Grantee:

The person to whom an interest in real property is conveyed. Generally, the buyer.

Grantor:

The person conveying an interest in real property. Generally, the seller.

Judgment Lien:

A lien upon the property of a debtor resulting from the decree of a court.

Judicial Sale:

A sale made under court order, by one appointed by the court, rather than a voluntary sale by the owner.

Leasehold Estate:

A way of holding title to a property wherein the mortgagor does not actually own the property but rather has a recorded long-term lease on it.

Real Estate Owned (REO):

Most commonly refers to property acquired by a lender through foreclosure or deed-in-lieu of foreclosure.