In real estate terms, the Chain of Title is exactly what it sounds like. It is the historical and public structure (chain) of transfers of title that claimants make to establish an interest in real property. The chain, in this case, is made up of the changes to title to a property between prior and new owners and/or owners and lien holders.
Chain of Title types comes to the forefront in disputes involving priority of title issues. An example of this would be a case where competing lien holder (lenders) claim to have the first interest in the property. One lender may then choose to quiet title and have the court declare who has priority. Priority is determined by examining the public record of recordings also known as the chain of title. If one party reordered first, then they are likely higher up in the chain of title and can then enjoy a priority claim to the property.
What does the Chain of Title consist of?
Apart from having a list of all of a property’s owners, Chain of Title often contains other information like easements, CC&Rs, deeds of trust, judgment liens, tax liens, death certificates and many other types of documents that impact who holds priority claims to record title – who can claim a greater interest in the property.
The easiest way to determine the chain of title is to get a preliminary title report from a title company to see how a third party views the chain of title.
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