Definitions

Abstract:  A written abbreviated summary of documents, recorded at various county offices concerning a particular parcel of property in a special format called State Bar of Wisconsin Abstracting Standards covering a specific period of time.  The abstract may be used to examine the chain of title to determine ownership to property.

Assignment:  A document that transfers ownership of something (i.e., mortgages, land contracts, property) from one person or entity to another.

Chain of Title:  Sequence of documents that have been recorded at the Register of Deeds Office that have transferred the property from one owner to the next. A deeds to B who deeds to C, who deeds to D, etc.

Construction Draw:  Money paid for work done on new construction or remodeling.  This money would usually be paid by a title insurance agent (GTS) acting on behalf of the lender that is loaning money to the person or entity building the home or other building, as the escrow agent.

Conveyance:  The transfer of title to property from one person to another.

Deed:  A written document, of various forms, by which title to real estate is transferred from one party to another. (Grantor = Seller, Grantee = Buyer) Examples are Warranty Deed, Quit Claim Deed, Personal Representative’s Deed, Trustee Deed, Condominium Deed, etc.

Domiciliary Letters:  An instrument given by the Court naming a Personal Representative for a deceased person’s estate.

Easement:  A right of use over the property of another.  Normally, it covers adjoining lands.  The land having the right of use is known as the dominant land, and the land which is subject to the easement is known as the servient land.

Encroachment:  The extension of a structure, fence line or any other use from the property to which it belongs across a boundary line and onto adjoining property owned by another.

Encumbrance:  A lien, claim or right upon the title to real estate, held by someone other than the real estate owner.

Endorsement:  A rider attached to a title insurance commitment or policy to expand or limit coverage. (I.e.: Environmental, Location, Comprehensive)

Escrow:  The act of a third party (perhaps a title company) holding a document, property or money of another until the happening of a contingency or performance of a condition where the third party (called the escrow agent) would then be required to release what was being held.  Example: an escrow agent holds money to pay for the painting of a room that was promised in the contract between a buyer and a seller, but was not completed in time for the closing.

Exception:  A provision in a title insurance binder or policy, which excludes liability regarding a specified title defect or an outstanding lien or encumbrance.

Fee Simple:  The total interest a person may have in land.  Such an estate is not qualified by any other interest and passes upon the death of the owners to the heirs free from any conditions.

Final Title Policy:  An Owner’s title insurance policy insures the title to property in accordance with terms of the policy.  A Lenders title insurance policy insures the position of the insured mortgage in accordance with terms of the policy.

Foreclosure:  A legal proceeding for the repossession of property covered in a mortgage or other liens on real estate which results in the transfer of property by Sheriff’s sale.

Gap Endorsement:  Gives coverage against intervening adverse matters affecting title which are recorded or filed between the date of commitment and the recording of the documents.

Homestead:  The real estate upon which one’s primary home is situated.

Inspections:  Physical viewing of property to insure that work is being done on new construction that corresponds with construction draws.

Interloper:  A grantor on a deed or other document outside the chain of title.  A deeds to B who deeds to C.  And X deeds to Y.  X and Y are interlopers because they are outside of the chain of title.

Judgment:  The final decision of a court where a lawsuit has been tried and decided by a Judge.  A judgment is a lien on property owned by the defendant in the lawsuit, for tens years if filed properly.

Land Contract:  A contractual financing devise between seller and buyer for the purchase and sale of land, the purchase price usually being payable in installments over a considerable period of time.  The document states that title does not transfer until paid in full, but the courts of Wisconsin, seeming to make things more confusing, have decided under the Doctrine of Equitable Conversion that title transfers at the time the Land Contract is signed just as if a deed were given.  This concept is very important to title searchers because then liens can attach against the buyer’s interest after the land contract is signed which would not happen if the seller continued to own the land during the term of the land contract.  In Minnesota and certain others states, a Land Contract is called a Contract for Deed.  (Vendor = Seller; Vendee = Buyer)

Legal Description:  A way to define a specific parcel of land.

Letter Report:  A brief report summarizing the documents that are recorded in the Register of Deeds and other offices concerning a piece of property from the time an owner takes ownership of the property through the current date.  Letter reports show mortgages, liens, judgments, taxes and legal description of the property.  A letter report does not show easements, agreements or restrictions. THIS DOES NOT GIVE ANY TITLE INSURANCE.

Lien:  A claim or charge against property that must be paid prior to obtaining clear title.  Usually, the law allows the owner of the lien to start a court proceeding to force the sale of the property to pay off the lien. (foreclosure).

Lis Pendens:  A legal notice to the world that a lawsuit is pending concerning a certain parcel of real estate.  Lis Pendens are filed in the Register of Deeds Office.

Lot and Blocks:  A land description in which boundaries are described in lots and blocks.

Master Policy:  A title insurance commitment issued to a developer of a condominium or subdivision and insures all the units of lots in the development. (See Take Off)

Metes and Bounds:  A type of land description in which boundaries are described by courses, directions, distances and monuments.

Mortgage:  A temporary conditional pledge of property to a creditor as security for the payment of a debt that may be cancelled by payment.  A mortgage is enforced by a lawsuit that is called a Mortgage Foreclosure.  ( Mortgagor = Borrower; Mortgagee = Lender)

Passive Trust:  In a passive trust the trustee simply has title to the trust property, while its control and management are in the beneficiary.  An equitable right or interest in property distinct from the legal ownership thereof; a use (as it existed before the Statute of Uses); also, a property interest held by one person for the benefit of another. Trusts are active, or special, express, implied, constructive, etc.

Patent:  An original transfer of ownership of property form the government.

Payoffs:  Money paid to lenders to release (satisfy) mortgages against property.

Personal Representative:  A person that has been given the authority, via Domiciliary Letters, to act on the behalf of a deceased person’s estate.

Power of Attorney:  A legal instrument authorizing one to act as another’s agent or attorney while the person granting the Power of Attorney is still living.  Authority ceases upon their death.

Prior:  A title insurance policy or abstract that we or another title company have already issued on a piece of property.

Probate:   A legal proceeding in which a court supervises the transfer of a deceased person’s assets according to their Will or, in the absence of the Will, according to the Wisconsin Law of Intestacy.

Purchase Money Mortgage:  A mortgage given by a purchaser to a seller or lender on the subject property to secure payment of a part of the purchase price.

Real Estate Security Agreement:   A document that establishes a debtor-creditor relationship to secure a debt with regard to real property.

Refinance (Refi):  Replaces an existing mortgage with a new mortgage to either the same or different lender.

Restriction:  Provisions in a deed or other instrument whereby an owner of land prohibits or restricts certain use, occupation, and improvement of the land.

Satisfaction:  An instrument executed by the holder of a lien, debt or obligation that acknowledges payment or fulfillment.  This document would be recorded in the Register of Deeds Office.

Special Assessment Letter:  A letter ordered from a municipality telling us whether any money is owed for taxes, sewer installation, curbs, gutters, etc.

Subordination:  A written document whereby the holder of one lien subordinates that lien (causes it to become legally inferior) to the lien or interest of another.  This document is usually recorded with the Register of Deeds Office.

Survey:  The map or plat drawn by a licensed surveyor which represents the property surveyed and shows the detailed measurements of the property.  (Certified Surveys are surveys recorded with the Register of Deeds).

Take-Off:  An owner’s policy issued on the sale of a unit or lot in a Master Policy.

Tax-Deferred Exchanges (Starker):  Allows an owner of business or investment property to exchange that property for new property without incurring current income tax on the gain, under section 1031 of Internal Revenue code. (Federal Tax Law)

Tax Lien:  The lien that is imposed upon real estate by operation of law which secures the payment of real estate or other taxes.  (Federal or State)

Title Commitment:  A written statement by a title insurance company setting for the conditions under which it will insure a particular parcel of property. The title commitment would usually be written and signed by a title insurance agent of the title insurance company.  GTS is a title insurance agent.

Title Insurance:  An insured statement of the condition of your ownership rights to a certain piece of property.

Title Search:  A search of the public records for recorded instruments which affect the title to a particular piece of land.

Transfer Tax:  State tax on the transfer of property.  Based on purchase of price or money changing hands.

UCC/Financing Statement:  Under the Uniform Commercial Code, Article 9, a part of the Wisconsin Statutes, a financing statement is used as evidence that there is a lien upon personal property to secure a debt.  May be filed by the security holder with the Secretary of State and/or recorded with the County recorder under prescribed conditions as a public record.

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Title Insurance 101