1. Chapter 13 Title Records Recording Statutes = laws that require the written instruments affecting title to real property to be entered into books of public record –Not done under common law –Adopted by all 50 states –Purpose: Protect 3 rd persons by giving notice that a prior transaction has occurred –Includes deed, mortgage, easement, etc. –All entries comprise the Chain Of Title

2. Chapter 13 Title Records Legal Notice = a knowledge of another’s interest in real property sufficient to make the adverse interest legally binding to the prospective purchaser or any other party acquiring interest in the property –Actual Notice – Information that is acquired personally First hand observation – inspection of the property Conducted a search of public records Given information by the seller or another party

3. Chapter 13 Title Records –Constructive Notice – information has been made available to the public Properly recorded documents Facts revealed by an inspection –Example: If an inspection shows a plainly visible drainage ditch on the property, you would have constructive notice of an easement

4. Chapter 13 Title Records –Implied ( Inquiry) Notice – Conditions exist that would lead a reasonable person to inquire further into the condition of the title

5. Chapter 13 Title Records Recording = the act of placing documents into the public record –Why? Sets priority Gives constructive notice –How? Must be notarized (acknowledged) Done by closing agent Pay recording fee Indexed by grantor and grantee

6. Chapter 13 Title Records Chain of Title = recorded history of events that affect the title to a specific parcel of land, usually beginning with the original grant –Attorney or title company will do a title search –In Virginia – Search back 60 years –A gap in the chain (cloud on the title) will prevent seller from delivering marketable title: can be removed by court action with a suit to quiet title

7. Chapter 13 Title Records Assurance (Evidence) of title –Abstract of title Summary of all recorded transactions Prepared by abstractor or attorney by doing a physical title search Also search public records such as judgements, potential tax liens, wills, etc. Combines with attorney’s opinion of title Errors in recording may leave buyer unprotected If abstractor is negligent, buyer can sue for damages

8. Chapter 13 Title Records Certification of Title – Similar to abstract with attorney’s opinion Title insurance –Insurance policy to protect from defects in the title –Lenders policy and owners policy available

9. Chapter 13 Title Records –Covers Forged documents Undisclosed heirs Misfiled documents Incorrect marital status Confusion over similar names Mistaken interpretation of wills Incompetent Grantors Extended coverage will include unrecorded liens

10. Chapter 13 Title Records Torrens Certificate –Landowner applies to have a title registered –Title search is done –Court determines if landowner is the true titleholder –Court orders certificate to be registered –All subsequent encumbrances will be entered on the certificate –Used in only 15 states