Flashcards in Unite 8 - part 1 Deck (12):
Public records contain detailed information about each parcel of real estate in a city or county.
- establish ownership
- give notice of encumbrances
- establish priority of liens
- protect the interests of real estate owners, taxing bodies, creditors, and the general public.
Recording is the act of placing documents in the public record.
Gives priority to those recorded first (first come, first serve) except liens for property taxes, special assessments, IRS.
What recording includes:
The real estate recording system includes written documents that affect title, such as:
Types of notice
There are 3 types of notices:
- constructive notice
- actual notice
- inquiry notice
Constructive notice is the legal presumption that anything recorded in a public record can be known by anyone who wants to know it. In real estate, constructive notice is also anything that can be learned by inspection of the property.
Distinguish from actual notice, in which a person is notified of a pending action by letter or in person.
Actual notice means not only that information of an interest in property is available but also that individual is directly told about something.
Inquiry notice is information that should impel a reasonable person to make further inquiries about some aspect of the property. For instance, if a path crosses the property, but there are no easements listed in the title record, then it would behoove the buyer of the property to inquire further about the path.
Priority refers to the order of when documents or liens were recorded.
Not all liens are recorded.
Statutory liens (inheritance taxes and corporate franchise taxes), real estate taxes and special assessments, which are taxes assessed to pay for a public improvement that benefits the property, are not recorded until well after payment was due.
Information about these off-the-record liens must be obtained from the municipalities, or receipts may be available to show that the real estate taxes were paid.
Chain of title
Chain of title is the list of owners from the 1st to the last, forming a chain of conveyances from one owner to the next.
However, if this chain is incomplete, then there is a cloud on the title (or gap in the chain of title), which indicates that the present owner doesn’t have a marketable title.
The chain can be broken because of a deed forgery, or it may be something simple such as a previous owner using a different name when conveying the title from the name used in acquiring the title.
The chain of title does not include liens and encumbrances or any other document not directly related to ownership.
Cloud on the Title
The term cloud on title refers to any irregularity in the chain of title of property that would give a reasonable person pause before accepting a conveyance of title.