Ownership and Titles: Chain of Title in Property Law

Title is everything in property law. If you hold title to property, you own it. Professionals seeking to understand our real estate system need to learn how title in property is created and transferred. Ownership signifies the legal right to possess and use property.¹

Clarity in titles and ownership is critical in property law. It ensures that property owner rights are clearly defined and protected, preventing disputes and fostering a stable market for property transactions.

Our legal system places a premium on knowing with certainty who owns a given piece of property. That’s because property is both a location to us (a home or a business) and an important asset. You can’t sell a piece of property if you can’t show you own it, and a bank won’t loan you money unless you have a valuable asset like property to ensure a loan to you.

This post explores the concepts of ownership and chain of title, examining the types of ownership, titles to real property, and transferring ownership through the chain of title.

Legal Owner: Types of Ownership

Recognizing various ownership rights is crucial. In this section, we explore sole ownership, joint tenancy (joint ownership), tenancy in common, community property, condominium ownership, and cooperative ownership:²

• Sole ownership is straightforward; one person holds complete control over the property
• Joint tenancy involves two or more persons sharing equal property ownership with rights of survivorship. If a joint tenant passes away, their share automatically transfers to the surviving joint tenants
• Tenancy in common allows individuals to own a property together without rights of survivorship. It offers flexibility in ownership shares, which can be unequal
• Community property recognizes marriage as a partnership where most property acquired during the union is owned equally by both spouses. It exists in certain states
• Condominium ownership grants individuals sole ownership of a unit within a larger property, and shared ownership of common areas³
• Cooperative ownership involves owning shares in a corporation that owns the property, with rights to occupy a specific unit

Title to Real Property: Deeds and Marketable Title

Title to real property is a basic concept of property law. Title deeds and documents are legal papers proving your right to own real property and are vital during a real estate transaction. These documents show legal ownership of tangible property. They detail the property’s history, including previous ownership and changes in ownership structure.⁴

The deed is the document that actually transfers the property from one party to another. Property can be transferred using three different types of deeds. Warranty deeds include promises from the seller to the buyer that the seller is transferring a good title. In the case of general warranty deeds, the seller promises that they have good title to the property; in the case of special warranty deeds, the seller’s promise is more limited: the seller promises that no outside claim to title has arisen during the time the seller has owned the land.

A quitclaim deed releases your ownership interest in a property without specifying the nature of your rights or interests. It does so with no warranties of your property rights. Quitclaim deeds make no guarantees that you, the grantor, have ownership interests in the property. Rather, it states that if you do, you release ownership rights.⁵

A clear and marketable title shows the property is free from legal claims that could burden the title of the buyer. Common title issues and defects can include simple clerical errors affecting public records, unresolved property taxes, claims by previous owner or owners, or joint tenancy issues. These defects can impact the transfer ownership process, so they need to be resolved before finalizing the real estate transaction.⁶

Transferring Legal Ownership: Chain of Title and Title Insurance

The process of transferring ownership of a piece of real property involves a series of specific steps. There are potential pitfalls at each stage of the process.

Sale and purchase agreements lay the foundation for transferring property ownership to a new owner. These agreements initiate the ownership transfer process. They are binding contracts, outlining the buyer and seller’s agreed-upon conditions, terms, and price.⁷

After the purchase and sale agreement is signed, the buyer conducts inspections and other due diligence and lines up funding for the purchase. Then the real estate closing takes place. This is when the parties sign the deeds, which are the documents that actually transfer the property from the seller to the buyer. To ensure a legitimate transfer of title, they must accurately reflect the agreement’s terms while complying with state laws.⁸

Title insurance protects buyers and lenders from potential title defects discovered post-sale. Title insurance safeguards against losses arising from disputes over property ownership, undisclosed liens or other house title or general title issues.⁹

Escrow acts as a neutral third party in property transactions. The role of escrow is to hold funds, documents and other key elements until all sale and purchase agreement conditions are met. Escrow ensures a smooth and secure transfer of ownership, minimizing risks for all parties. The escrow process is crucial in managing the transaction, from title reports to the final exchange of deeds and funds.¹⁰

Better Understand Property Ownership and Transform Your Career With an Online MSL From Pitt Law

Embarking on your Online Master of Studies in Law (MSL) journey online with Pitt Law is an exciting decision. It marks the beginning of a transformative chapter in your professional life. The MSL program is designed for ambitious professionals like you who are not seeking to become lawyers but whose careers demand a deep understanding of the law. A course on property is just one of the MSL core courses you will take to build a foundational understanding of the law. Then, you will tailor your education to your career aspirations, with options to specialize in corporate compliance, health care compliance, HR law, international business law, or sports, entertainment, and arts law.

The University of Pittsburgh Law School’s Online MSL program is distinguished by its robust curriculum and outstanding faculty. This program equips you to apply legal principles in real scenarios, enhancing your professional capabilities and making you an invaluable asset to your organization.

Benefits of Pitt Law’s MSL Online

The MSL program offers students:

• Curriculum strength: Dive deep into specialized areas with a curriculum designed for real-world application
• Faculty expertise: Learn from distinguished faculty recognized as leading practitioners in their field
• Networking opportunities: Connect with a diverse network of professionals who can propel your career forward
• Online flexibility: Balance your career advancement with your personal life via the convenience of online learning

We invite you to take the leap and earn your Online MSL with Pitt Law. Seize the opportunity to enhance your professional trajectory and secure a competitive edge in your field.

Schedule a call with an admissions outreach advisor today and take the first step towards a future where your understanding of the law transforms your career.