Glossary of Terms

A - N    O P Q R S T U V W X Y Z

O

OBLIGEE:

One to whom an obligation (promise) is owned.

OBLIGOR:

One who legally binds (obligates) oneself, such as the maker of a promissory note.

ORIGINAL COST:

The purchase price of property, paid by the present owner. The present owner may or may not be the first owner.

OWNER'S POLICY:

A policy of title insurance usually insuring an owner of real estate against loss occasioned by defects in, liens against or unmarketability of the owner's title.

P

PARCEL:

Any area of land contained within a single description.

PARTNERSHIP:

An association of two or more persons who have contracted to join in business and share the profits.

PARTY WALL:

A wall generally erected on a property boundary or between two lots for the common benefit and use of the property owners on either side.

PATENT:

A conveyance of title to land by the Federal or State Government.

PERSONAL PROPERTY (movable):

Any property that is not designated by law as real property (i.e., money, goods, evidences of debt, rights of action, furniture, automobiles).

"P.I.Q.":

A title term referring to Property In Question.

PITI:

A payment that combines Principal, Interest, Taxes, and Insurance.

PLAT:

A plan, map or chart of a tract or town site dividing a parcel of land into lots.

POWER OF ATTORNEY:

A document by which one person (called the "principal") authorizes another person (called the "attorney-in-fact") to act for him/her in a specific manner in designated transactions.

"PRE," "PRELIM" OR PRELIMINARY REPORT:

A written report issued by a title company, preliminary to issuing title insurance, which shows the recorded condition of title of the property in question. See Commitment.

PRIORITY:

The order of preference, rank or position of the various liens and encumbrances affecting the title to a particular parcel of land. Usually, the date and time of recording determine the relative priority between documents

PRIORITY INSPECTION:

A title term referring to the type of inspection made in connection with insuring a new construction loan. In making the inspection of the property, the Title Company must be assured that the work of improvement had not yet begun when the lender's deed of trust was recorded.

PUBLIC DOMAIN:

Land owned by the government and belonging to the community at large.

PUBLIC RECORDS:

The transcriptions in a recorder's office of instruments which have been recorded, including the indexes pertaining to them.

Q

QUITCLAIM DEED:

A deed operating as a release; intended to pass any title, interest, or claim which the grantor may have in the property, but not containing any warranty of a valid interest or title in the grantor.

QUIET TITLE:

To free the title to a piece of land from the claims of other persons by means of a court action called a "quiet title" action. The court decree obtained is a "quiet title" decree.

R

REAL PROPERTY (immovable):

Land, from the center of the earth and extending above the surface indefinitely, including all inherent natural attributes and any man-made improvements of a permanent nature place thereon. For example: minerals, trees, buildings, appurtenant rights.

RECONVEYANCE:

An instrument used to transfer title from a trustee to the equitable owner of real estate, when title is held as collateral security for a debt. Most commonly used upon payment in full of a trust deed. Also called a deed of reconveyance or release.

RECORDING:

Filing documents affecting real property as a matter of public record, giving notice to future purchasers, creditors, or other interested parties. Recording is controlled by statute and usually requires the witnessing and notarizing of an instrument to be recorded.

REINSURANCE:

A contract which one insurer makes with another to protect the first insurer, wholly or partially, against loss or liability by reason of a risk under a separate and distinct contract as insurer of a third party.
Reinsurance differs from coinsurance in that, in the case of reinsurance, only one insurer has a direct contractual relationship with the insured, and that insurer (commonly referred to as the "lead insurer") purchases reinsurance in order to lessen or spread the risk. The "lead insurer" will assume a risk up to a limit (the amount of which is referred to as the "retention") and any loss which exceeds this limit would be borne by the reinsurers.
In the case of coinsurance, each coinsurer has a direct contractual relationship with the insured, and the risk is shared in agreed-upon proportions from the first dollar of loss.

RESTRICTIONS:

Often called restrictive covenants. Provisions in a deed or other instrument whereby an owner of land prohibits or restricts certain use, occupation or improvement of the land.

RIGHT OF WAY:

(1)The right to pass over property owned by another, usually based upon an easement. (2) A path or thoroughfare over which passage is made. (3) A strip of land over which facilities such as highways, railroads or power lines are built.

S

SALE AND LEASE BACK:

A situation in which the grantor in a deed to a parcel of property sells it and retains possession by simultaneously leasing it from the grantee.

SEARCH:

In title industry parlance, a careful exploration and examination of the public records in an effort to find all recorded instruments relating to a particular chain of title.

SEPARATE PROPERTY:

Real property owned by one spouse exclusive of any interest of the other spouse.

SQUATTER:

One who settles upon unoccupied land without legal claim or authority. (See Adverse Possession.)

STARTER:

A copy of the last policy or report issued by a title insurer which described the title to land upon which a new search is to be made. In some states, this is called a back title letter or back title certificate.

STREET IMPROVEMENT BONDS:

Interest-bearing bonds issued, usually by a city or county, to secure the payment of assessments levied against land to pay for street improvements. The property owner may pay off the particular assessment against the property, or may allow the assessment to "go to bond" and pay installments of principal and interest over a period of years, usually at the city or county treasurer's office. The holder of a bond received payments from these offices.

SUBDIVISION:

An area of land laid out and divided into lots, blocks, and building sites, and in which public facilities are laid out, such as streets, alleys, parks, and easements for public utilities.

SUBORDINATION AGREEMENT:

An agreement by which one encumbrance (for example, a mortgage) is made subject to another encumbrance (for example, a mortgage) is made subject to another encumbrance (perhaps a lease). To "subordinate" is to "make subject to," or to make of lower priority.

SURFACE RIGHTS:

Rights to enter upon and use the surface of a parcel of land, usually in connection with an oil and gas lease or other mineral lease. They may be "implied" by the language of the lease (no explicit reservation or exception of the surface rights) or "explicitly" set forth.

SURVEY:

The measurement by a surveyor of real property which delineates the boundaries of a parcel of land. An ALTA survey additionally delineates the exact location of all improvements, encroachments, easements and other matters affecting the title to the property in question. A title insurance company may require a survey whenever the company is requested to issue an ALTA Extended Coverage Policy.

T

TAX DEED:

A deed executed by the tax collector to the state, county or city when no redemption is made from a tax sale.

TAX SALE:

Property on which current county taxes have not been paid is "sold to the state." No actual sale takes place - the title is transferred to the state and the owner may redeem it by paying taxes, penalties and costs.
If it has not been redeemed within five years, the property (referred to as "tax sold property") is actually deeded to the state. (Similar "sales" to cities take place for unpaid city taxes.)

TESTATE:

Leaving a legally valid will at death. See Intestate.

TITLE: (1)

A combination of all the elements that constitute a legal right to own, possess, use, control, enjoy and dispose of real estate or a right or interest therein. (2) The rights of ownership recognized and protected by the law.

TITLE INSURANCE:

Insured statement of the condition of title or ownership of real property. For a one-time-only premium, the named insured and their heirs are protected against title defects, liens and encumbrances existing as of the date of the policy and not specifically excluded from it. In the event of a claim, the Title Company provides legal defense from the policyholder and pays any covered losses incurred as a result of such claim.

TITLE REPORT:

See Preliminary Report.

TITLE SEARCH:

A review of all recorded documents affecting a specific parcel of land to determine the present condition of title. An experienced title officer or attorney reviews and analyzes all material relating to the search, then determines the sufficiency and status of title for insurance of a title insurance policy.

TRUSTEE:

See Deed of Trust.

TRUSTOR:

See Deed of Trust.

U

UNDERWRITER:

         An insurance company that insures title. An underwriting company may 

         have independent agencies who issue insurance policies in their behalf or

         may be the primary issuing agent themselves. 

 

UNDERWRITTEN COMPANY / AGENCY:

A title firm (agency) which conducts title searches but is not qualified to insure, and therefore issues policies of a qualified title insurer (underwriter) in return for a portion of the premium.

 

V

VARIABLE INTEREST RATE:

An interest rate that fluctuates with the current cost of money; subject to adjustment if the prevailing rate moves up or down.

VENDEE:

See Agreement of Sale.

VENDOR:

See Agreement of Sale.

VENDOR'S LIEN:

An implied lien given by law to a vendor for the remaining unpaid and unsecured part of a purchase price

W

WARRANT:

To legally assure that the title conveyed is good and possession will be undisturbed.

WARRANTY DEED:

A deed used in many states to convey fee title to real property.

WILL:

A written expression of the desire of a person as to the disposition of that person's property after death. Must follow certain procedures to be valid.

Z

ZONING:

The division of a city or a county by legislative regulations into areas (zones), specifying the uses allowable for the real property in these areas.

Top