Definition of Abstract of Title
The abstract of title is a written report that provides a legal history of a property. As part of a property’s title search, the abstract of title provides a brief history of all the legal actions and decisions related to the property or parcel of real estate as recorded in the local Land Registry Office.
Why is this term important?
The abstract of title is typically completed by your real estate lawyer or notary and provides a snapshot of all mortgages, liens, litigations, easements and taxes registered against a property.
The abstract of title is important, as it can be used to determine if there are any claims against the property—claims that a potential buyer may have to assume if they take ownership of the property.
Examples of term
Let’s say you want to buy a home located at 123 Spruce Street. As part of the transaction, your Realtor or legal representative obtains a copy of the property’s abstract of title. This legal document informs you that while the seller is authorized to sell the property, there are two liens. One from a renovation contractor that wasn’t paid in full and another for unpaid property taxes. If you proceed with the sale without addressing the liens, you may be on the hook.