Title Terms & Descriptions
Insurance that protects against the risk of financial harm that arises from claims against the rights of ownership in real property. In New Jersey law, the term “title insurance” means “insuring, guaranteeing or indemnifying owners of real property or others interested therein against loss or damage suffered by reason of liens, encumbrances upon, defects in or the unmarketability of the title to said property, guaranteeing, warranting, or otherwise insuring by a title insurance company the correctness of searches relating to the title to real property, or doing any business in substance equivalent to any of the foregoing in a manner designed to evade the provisions of this act."
A legal document that represents the borrower’s personal liability to pay the debt. The note is signed by the borrower, and includes the amount of the loan, the interest rate, the term of the loan, the frequency and amount of payments and the obligations of the borrower to pay. The note may be called a “mortgage note” or “promissory note.”
A contract which transfers a real estate interest as security for payment of a debt.
A legal instrument through which title to real estate is conveyed from one party to another.
A deed that does not include any warranties and that gives, grants, bargains, sells and conveys land to the grantee to have and hold forever.
A type of ownership that gives the owner full control of and all rights to real property, including the right to sell, mortgage or devise by will. If a deed does not specify the type of estate being conveyed, it is assumed that it is conveyed in fee simple absolute.
A deed under which the grantor transfers whatever interest the grantor has in the property, without making any warranties. It is often used to release claims made against an owner of land in order to clear a title of any claimed interest which would make it otherwise unmarketable. Title insurers may not insure title risks that are cleared by a quitclaim deed.
A type of deed that contains some warranties, but does not contain as many warrants as a full covenant and warranty deed. A special warranty deed is used in the instance of a foreclosure and only covers any defects in title while the property was in the grantor’s possession.
A form of ownership under which two or more people have an undivided, equal ownership of interest in property. If a joint tenant dies, the deceased’s share in the ownership passes to the remaining joint tenants under rights of survivorship.
A property title that has no defects, meaning that the title has no encumbrances, such as liens or judgments, and no legal disputes surrounding its ownership or boundaries. Properties with clear titles are marketable for sale so the property may be transferred to a new owner.
A form of ownership wherein two or more people have an individual ownership of interest in property. The interest of each of the owners may be in any proportion, and the total of each owner’s interest equals 100%. Each tenant in common has the right to sell or devise by will his or her interest without the consent of the other owner or owners.
A form of ownership that can occur only between a husband and wife.
The party in a transfer of real estate to whom the deed is conveyed; one to whom a grant is made.
The party in a transfer of real estate who conveys the deed; one who makes the grant. Also the party who transfers property to a trust.
Irregularity or fault in the title irregular or faulty. Example of defects in title include: forged deeds or related documents; deeds executed by a minor; deeds executed by an incompetent person; falsified public records; errors or omissions; deeds executed by persons who present themselves as single, but who are actually married; deeds transferred based on a will which is invalid or which is misinterpreted; and deeds which are executed by an unauthorized individual, such as an individual who exercises an expired power of attorney.
A claim, lien, charge or liability that is attached to and binding on real property, but which does not keep the owner from transferring the title, as long as the obligations related to the claim, lien, charge or liability are satisfied. Mortgages, leases and some easements are examples of encumbrances.
The process used to enforce the property rights of lenders of conventional mortgages, conventional insured mortgages, FHA-insured mortgages and VA-guaranteed mortgages and of certain other lien holders, which occurs if a borrower does not make payments in accordance with his mortgage or note and the lender or the lien holder has the right to sell the property.
The condition of no will being in place upon the death of an estate holder. State laws dictate the distribution of property when an estate holder dies intestate.
A trust whose terms cannot be changed after the trust’s creation. Once a grantor places property in an irrevocable trust, it must remain in trust and distributed to beneficiaries according to the trust’s terms.
The legal right of the possession of property as security against the fulfillment of a legal duty to the person holding the property; a claim against real estate or personal property for the satisfaction of a debt or obligation which may be voluntary or involuntary. Mortgages are an example of a voluntary lien and a mechanic’s lien or tax liens are involuntary liens.
A property description that specifies the property’s shape and dimension. It starts at a beginning point on the boundary of a property and follows compass directions, called courses, and distances around the area, to the beginning point. Monuments are used or placed where the direction changes. These monuments are the bounds in the description and mark the properties boundaries. The metes are the measurements. If the description does not end back at the beginning point, it is invalid.
The legal process that occurs upon the death of a property owner that ensures clear title to property in an estate prior to transferring this property to estate beneficiaries.
A document filed in the recorder’s office to show that a lien, note, mortgage or other claim or cloud on a title is clear.