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Title Search and Title Insurance

The examination of public records that establishes who owns a property and what claims stand against it, and the insurance policy that pays if that examination missed something - who is protected by the lender's policy, who by the owner's, and what neither covers.

Informational only - this is not legal advice. These definitions explain general legal vocabulary in plain English. They are not advice about your situation, reading them creates no attorney-client relationship, and the law differs from state to state and changes over time. For advice you can rely on, speak to a lawyer licensed in your state.

What it means

Ownership of land in the United States is proved not by a certificate but by a chain of recorded documents - deeds, mortgages, releases, judgments, liens, easements, plats - kept by a county recorder or clerk. A title search traces that chain back through the public records for the property and for each owner in it, looking for a break in the chain, an unreleased mortgage, a judgment lien against a prior owner, an unpaid tax, a recorded easement or restriction, a pending lawsuit, or a deed signed by someone who lacked the power to sign it. The result is a title commitment or abstract listing what was found, with the defects that must be cleared before closing and the exceptions that will remain.

Title insurance is an indemnity against what the search missed or could not have found: a forged deed, an undisclosed heir, a recording error, a lien filed in the wrong index, a survey encroachment. Unlike other insurance it is paid for once, at closing, and covers the past rather than the future - it insures the state of title as of the policy date and does not cover defects created afterwards. There are two policies. The lender's policy, which nearly every mortgage lender requires the borrower to buy, protects only the lender and only up to the loan balance. The owner's policy, which is optional in most states and is the one the buyer should ask about, protects the owner's equity for as long as the owner or the owner's heirs hold the property, and pays the cost of defending the title in court.

Every policy carries standard exceptions - matters a survey would reveal, rights of parties in possession, unrecorded easements, taxes not yet due - and the specific exceptions listed in the commitment, so a buyer who does not read the commitment before closing may find that the very problem they later discover was excluded. In most states a recording statute decides priority between competing claims by who recorded first and who took without notice, which is why a deed or mortgage is recorded promptly and why a search runs to the moment of closing.

Where this comes from

Recording and priority are governed by each state's recording act - "race", "notice" or "race-notice" in form - and its title-standards; there is no federal title law. The American Land Title Association (ALTA) standard owner's and loan policy forms, most recently revised in 2021, are used in nearly every state and define the covered risks and standard exceptions. The Real Estate Settlement Procedures Act, 12 U.S.C. § 2608, forbids a seller from requiring the buyer to use a particular title company as a condition of sale, and RESPA and the TILA-RESPA Integrated Disclosure rule (12 C.F.R. part 1026) govern how title charges appear on the Loan Estimate and Closing Disclosure. Title-insurance rates are regulated by state insurance departments and in some states are filed and uniform.

When people hire a lawyer for this

A buyer usually meets a real-estate lawyer or a title company's examiner at closing, but the useful moment is earlier: reading the title commitment and survey before the contingency deadlines pass, and understanding which exceptions can be cleared and which will follow the property. An owner who discovers a title problem years later - a neighbour's claim, a lien from a prior owner, an heir who says the deed was never valid - should first find the owner's policy, because the insurer's duty to defend may cover the lawyer.

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Part of the LawyerLand plain-English legal glossary. Definitions are written from primary sources - statutes and court rules - and each entry states the authority it rests on, or says plainly when the doctrine is state law with no national rule.

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