Chain of Title

The previous chapter examined the Recording Acts, which establish the rules governing the public recording of deeds and other interests affecting real property.

Recording, however, is only part of the process.

Once documents have been recorded, lawyers, title examiners, lenders, courts, and title insurance companies must determine whether those recorded documents establish valid ownership.

That process requires examining the property's chain of title.

A chain of title is the historical sequence of ownership transfers and other recorded interests affecting a parcel of land. By tracing each recorded conveyance from one owner to the next, title professionals determine whether the current owner possesses a valid interest and identify defects, encumbrances, or competing claims that may affect marketable title. (Legal Information Institute)

Understanding the chain of title is essential because nearly every real estate transaction depends upon the ability to establish ownership through the public land records.

A chain of title is the chronological history of ownership and recorded interests affecting a particular parcel of real property.

Each transfer of ownership becomes another "link" in the chain.

A complete chain of title ordinarily shows:

• each owner in succession;
• the deed transferring ownership;
• the dates of conveyance;
• recorded encumbrances affecting title;
• instruments releasing or modifying those encumbrances.

The chain is not limited to deeds. It also includes many other recorded instruments that affect ownership or the condition of title. (Legal Information Institute)

A reliable chain of title serves several important purposes.

It helps:

• establish legal ownership;
• identify competing claims;
• discover outstanding liens;
• verify easements and restrictive covenants;
• support mortgage lending;
• facilitate title insurance;
• promote confidence in real estate transactions.

If the chain contains unexplained gaps or defects, buyers, lenders, and title insurers may refuse to proceed until those issues are resolved. (Legal Information Institute)

Title professionals generally begin with the current owner and work backward through the public records.

The examination typically includes:

• locating the current deed;
• identifying the grantor;
• locating the deed by which that grantor acquired title;
• repeating the process through prior conveyances;
• reviewing all recorded instruments affecting each ownership period.

Each conveyance should logically connect to the preceding one. For example:

If one link cannot be verified, additional investigation is often required before title can be considered reliable. (Legal Information Institute)

Although deeds form the backbone of the chain, many other recorded instruments may affect ownership.

Common documents include:

• warranty deeds;
• special warranty deeds;
• quitclaim deeds;
• mortgages;
• mortgage assignments;
• mortgage satisfactions or releases;
• easements;
• restrictive covenants;
• judgments affecting title;
• tax deeds;
• probate orders;
• trustee's deeds;
• sheriff's deeds;
• plats and subdivision maps.

Each document may affect ownership, priority, or the marketability of title. (Legal Information Institute)

A break in the chain of title occurs when the public records fail to establish a complete and logical sequence of ownership.

Common causes include:

• missing deeds;
• forged instruments;
• recording errors;
• incorrect legal descriptions;
• unreleased mortgages;
• unresolved probate proceedings;
• improperly executed conveyances;
• missing signatures;
• indexing mistakes.

A break in the chain does not automatically determine ownership, but it frequently raises questions requiring further legal investigation before property can be sold or financed. (Legal Information Institute)

One particularly important defect is the wild deed.

A wild deed is a recorded deed that falls outside the property's chain of title. Because it is disconnected from the recorded ownership history, a routine title search may not discover it.

For example, suppose O conveys property to A, but A never records the deed. A later conveys the property to B, and B records immediately. Because A's ownership was never recorded, B's deed may appear outside the searchable chain of title, creating what property lawyers refer to as a wild deed.

Whether such a deed affects later purchasers depends upon the applicable recording statute and governing case law.

A title examination is the process of reviewing the public land records to determine the status of title.

Title examinations are commonly performed by:

• real estate attorneys;
• title examiners;
• title companies.

The examination seeks to identify:

• current ownership;
• prior conveyances;
• mortgages;
• easements;
• liens;
• judgments;
• restrictive covenants;
• unresolved defects.

The completed examination forms the basis for many title insurance commitments issued before closing. (Legal Information Institute)

Although closely related, chain of title and marketable title are not identical concepts.

A complete chain of title helps establish ownership history. Marketable title concerns whether the title is reasonably free from substantial defects or claims that would expose the purchaser to litigation or materially diminish the property's value.

An unbroken chain of title is an important foundation for marketable title, but additional issues—such as unreleased liens, restrictive covenants, or boundary disputes—may still affect marketability. (Legal Information Institute)

"One Recorded Deed Proves Perfect Ownership"

Incorrect. A single deed is only one link in the chain. Ownership is evaluated by examining the complete history of recorded transfers. (Legal Information Institute)

"The Chain of Title Consists Only of Deeds"

Incorrect. Mortgages, easements, judgments, probate proceedings, releases, and many other recorded instruments may affect title.

"Recording Eliminates Every Title Problem"

No. Recording preserves the public record and provides notice under applicable law. It does not eliminate forged deeds, indexing errors, missing conveyances, or other defects that may affect ownership. (Legal Information Institute)

The chain of title connects nearly every doctrine discussed throughout this volume.

Primary Authorities

• State recording acts
• State conveyancing statutes
• County land records
• Judicial decisions concerning title disputes
• Probate records
• Survey records and plats

Authoritative Secondary Sources

• Powell on Real Property
• Thompson on Real Property
• Tiffany Real Property
• Restatement (Third) of Property
• Corpus Juris Secundum (C.J.S.) Abstracts of Title and Title Examination
• American Jurisprudence 2d (Am. Jur. 2d) Abstracts of Title

These secondary authorities explain title examination principles but do not replace controlling statutes or binding judicial decisions.

• A chain of title is the chronological history of ownership transfers and recorded interests affecting a parcel of real property. (Legal Information Institute)
• Title professionals verify ownership by tracing recorded instruments through the public land records. (Legal Information Institute)
• A chain of title includes deeds, mortgages, easements, liens, judgments, probate records, and other recorded instruments affecting ownership.
• Breaks in the chain may create uncertainty regarding ownership and require additional legal investigation.
• A complete chain of title is fundamental to real estate transactions, mortgage lending, title insurance, and marketable title. (Legal Information Institute)
• Understanding the chain of title prepares readers for the next chapter on Title Insurance, where the risks associated with undiscovered title defects are examined. (Legal Information Institute)

Next Chapter — Title Insurance

The next chapter examines title insurance, the mechanism by which purchasers and lenders protect themselves against certain title defects that may not be discovered during a title examination. Readers will learn how title commitments are prepared, what owner's and lender's policies cover, common exclusions and exceptions, and why title insurance remains an essential part of modern real estate transactions. (Legal Information Institute)