Included in this glossary are terms commonly used in the Title Insurance business and the Settlement process. They are intentionally brief and defined in their title insurance and settlement context. As such, they are not intended to be applied to all possible uses of the terms.  If you would like to discuss any of the terms further, do not hesitate to contact one of our staff or request more detailed information using our on-line form.

A

Abstract (of title). A summary of public records relating to the title to a particular parcel of land.

Acknowledgment. A formal declaration before an authorized officer (usually a notary public) by a person who has executed an instrument that such execution is the individual’s act.

Adverse possession. Physical possession of land inconsistent with the right of the owner.  In most states, a party in adverse possession, after satisfying fully the requirements of the relevant statutes, thereby acquires the title to the land.

Affiant. One who swears to or affirms the statement in an affidavit.

Affidavit. A statement in writing sworn or affirmed to before an official (usually a notary public) who has the authority to administer an oath or affirmation.

Affirmative coverage. Provisions in policies by which the insurer affirmatively insures against loss due to specific risks generally not covered by policies; for example, insurance against loss due to violation of usury or truth-in-lending statues or restrictive covenants.

 ALTA. American Land Title Association, a national association of title insurance company and title abstract organizations.  This term is used most frequently as part of the identification of standard policy forms adopted by that association.

Approved attorney. An attorney approved by a title insurance company as one whose opinions of title will be accepted by the company and relied upon for the issuance of title insurance policies.

Appurtenances. Rights which pass with the title to the land itself.  These rights may affect other lands; e.g., an appropriate access easement over adjoining land.

Assessment. A special tax imposed on owners of land by governing bodies for the purpose of paying for improvements (sewer lines, sidewalks, street paving, etc.) which benefit the land of such owners.

Assignment. A transfer of (or the document transferring) a right and/or interest in land.  Used often in transferring interests of a mortgagee or of a lessee.    Assignor is the person who transfers the interest; assignee is the person to whom the interest is transferred.

Attorney in fact. A person who holds a power of attorney from another to execute specified documents on behalf of the grantor of the power.

 B

Binder or commitment. An enforceable agreement that upon satisfaction of the requirements which are stated in the binder the insurer will issue the specified title insurance policy subject only to the exceptions stated in the binder.  A binder sets forth status of title as of a particular date.

Building (restriction) line or setback. A line fixed at a certain distance from the front and/or sides of a lot or at a certain distance from a road or street, which line marks the boundary of the area within which no part of any building may project.  This line may be established by a filed plat of subdivision, by restrictive covenants in deeds or leases, by building codes, or by zoning ordinances.

C

Chain of Title. The successive ownerships or transfers in the history of title to a particular parcel of land.  Each deed or other instrument effecting a transfer of the title is called a “link” and all of the links constitute the chain.

Closing. (1) Process by which all the parties to a real estate transaction conclude the details of a sale or mortgage. The process includes the signing and transfer of documents and distribution of funds. (2) Condition in description of real property by courses and distances at the boundary lines where the lines meet to include all the tract of land.   Also referred to as settlement.

Closing costs. Miscellaneous expenses involved in closing a real estate transaction over and above the price of the land.

Cloud of title.  An outstanding claim or encumbrance which adversely affects the marketability of title.

Community property. A category of property, existing in some states, in which all property (except property specifically acquired by husband or wife as separate property) acquired by a husband and wife, or either, during marriage, is owned in common by the husband and wife.

Condemnation. (1) The lawful taking of private land for public use by a government under its right of eminent domain. (2) A declaration by a governmental agency that a building is unfit for use.

Condominium. A system of real estate ownership wherein there is separate ownership of units in a multi-unit project with each separate unit ownership being coupled with an undivided share in the entire project less all of the units.

Condominium declaration. The document which establishes a condominium and describes the most important property rights of the unit owners.  Special statutes in each state prescribe the contents of this document, known in some states as a “master deed”.

Construction loan.  A loan which is made to finance the actual construction or improvement on land.  It is often the practice to made disbursements in increments as the construction progresses.

Conveyance. (1) A document which transfers an interest in real property from one person to
another; e.g., a deed. (2) The act of executing and delivering a deed or mortgage.

Curtesy. A husband’s life estate in the property of his deceased wife.  By statute in most states, it isa life estate in one third of the land she owned during their marriage. Courtesy has been abolished by statute in some states.

D

Dedication. The granting of land by the owner for some public use and its acceptance for such use by authorized public officials.

Deed. A written instrument duly executed and delivered by which the title to land is transferred from one person to another.

Deed of trust. A conveyance of a land title by a maker of a note (the debtor) to a third party, a trustee, as collateral security for the payment of the note with the condition that the trustee shall re-convey the title to the debtor upon payment of the note, and with power in the trustee to sell the land and pay the note in the event of a default on the part of the debtor.  Also referred to as a mortgage.

Deficiency judgment.  A judgment against a person liable for the debt secured by a mortgage in an amount by which the funds derived from a foreclosure or trustee’s sale are less that the amount due on the debt.

Devise. A gift of land by will or to give land by will.  A devisee is the person to whom property is given by a will.

Dower. An estate for life to which a married woman by statute is entitled on the death of her
husband.  In most states it is a life estate of one third of the value of all land which the husband owned during their marriage.  Dower has been abolished by statute in some states.  The reason for requiring a wife’s joining in the deed of any land by her husband is the release of her dower right.

E

Easement. A privilege or right of use or enjoyment which one person may have in the lands of another; for example, a right of way to install, operate, and maintain utility lines.

Eminent domain. The right of a government to appropriate private property for a public use by making reasonable payment to the owner of such property.

Encroachment. The intrusion of any improvement partly or entirely on the land of another.

Encumbrance. Any right or interest in land held by persons other than the fee owner which right or interest lessens the value of the fee title.  Examples are judgment liens, easements, mortgages, and restrictions.

Escheat. The transfer of title of property to the state if the owner dies in testate and without heirs.

Escrow. Money, securities, documents, or other property deposited with a third party to be held by the third party (called the escrow agent) until the happening of a future event and then to be delivered to the designated party.  In some states nearly all real estate transactions are closed through the use of escrow.

Estate. The degree, quantity, nature, and extent of interest which a person has in land.

Examination of title. The review of the chain of title as revealed by an abstract of the title or public records.

Exceptions. Those matters affecting title to the particular parcel of realty which matters are
excluded from coverage of the particular title insurance policy.

Exclusions. Those general matters affecting title to real property excluded from coverage of a title insurance policy.

Executor. A person named in a will to administer the estate.  Executrix is the feminine form.

F

Fee Simple. An estate in which the owner is entitled to the entire property, with unconditional power of disposition during the owner’s life, and which descends to the heirs upon the owner’s death if the owner dies without a will.

Foreclosure. Legal process by which a mortgagor of real property is deprived of interest in that property due to failure to comply with terms and conditions of the mortgage.

G

General Warranty deed. A deed containing a covenant whereby the seller agrees to protect the buyer against being dispossessed because of any adverse claim against the land.

Grantee. In a deed, the person to whom the land is transferred.

Grantor. In a deed, the person who transfers the land.

H

Heir. The person who, at the death of the owner of land, is entitled to the land if the owner has died without a will.

HUD. The Department of Housing and Urban Development.  It is responsible for the
implementation and administration of U.S. government housing and urban development programs.

I

Indemnity agreement. An agreement by the maker of the document to repay the addressee of the agreement up to the limit stated for any loss due to the contingency stated on the agreement.

Insurable title. A land title which a title insurance company is willing to insure.

Intestate. Without having made a valid will or one who dies without having made a will.

J

Joint Tenants. Persons who are co-owners of interests in the same land.  At common law and in some states today, upon the death of a joint tenant, interest automatically passes to the surviving joint tenant(s).  This survivorship feature, when it exists, is the principal distinction between a joint tenancy and a tenancy in common.

Judgment. The formal expression and evidence of the decision of a court in a specific lawsuit. Where the judgment decrees that one party (the judgment debtor) pay another party (the judgment creditor) a certain sum of money, the recording of that judgment creates a lien upon all land of the judgment debtor in that jurisdiction.

Junior mortgage. A mortgage, the lien of which is subordinate to that of another mortgage.

L

Legal description. A property description which by law is sufficient to locate and identify the parcel of real property.

Lien. A claim or charge on property of another for payment of some debt, obligation, or duty.

Lien waiver or waiver of rights. A document signed by the general contractor, each
subcontractor, and each materialman of a construction project whereby the signators waive their right to mechanics’ liens on the land involved in that particular project.

Life estate. An individual’s right to the use and occupancy of real property for life.

Lis Pendens. A legal notice that there is litigation pending relating to the land and a warning that anyone obtaining an interest subsequent to the date of the notice may be bound by the judgment.

Loan policy or mortgage policy or mortgagee policy. A title insurance policy in which the
insurer insures the mortgagee against loss it may suffer because the title is not vested as stated in the policy and insures the validity and priority of the mortgage lien over any other lien not excepted to in the policy.

M

Marketable title.  A title which a reasonable purchaser, well informed as to the facts and their legal meaning, would be willing to accept.

Mechanics’ and materialmen’s lien or mechanics’ lien or M&M lien. The lien which by statute a laborer or materialman may have against the land by reason of furnishing labor or material for the improvement of the property.  The priority of such lien varies among the states; in some states M&M liens take priority over prerecorded mortgages.

Metes and bounds. A description of a parcel of land by describing the boundary lines in length and direction.

Mortgage. An instrument whereby an owner conditionally transfers title of property to another as security for payment of a debt.  The owner retains possession and use of the land and, upon the payment of the debt, the mortgage becomes void.

Mortgagee. The lender who provides the money for the mortgage and to whom the mortgage is given.

Mortgagor. The person who borrows the money from the mortgagee, and who signs the mortgage as security.

N

Note. A written promise to pay a certain amount of money, at a certain time, or in a certain number of installments. It usually provides for payment of interest and its payment is at times secured by a mortgage.

O

Owner’s policy. A title insurance policy insuring the owner against loss due to any defect of title not excepted to or excluded from the policy.

P

Planned unit development (PUD). A project consisting of individually owned parcels of land together with common areas and facilities that are owned by an association of which the owners of all the parcels are members.

Plat (of survey). A map of land made by a surveyor showing boundary lines, buildings, and other improvements on the land.

Power of attorney. An instrument in writing by which one person, the principal, authorizes another, the attorney in fact, to act in the specific actions described in the instrument.

Prescription. The doctrine by which easements are acquired by long, continuous, and exclusive use and possession of property.

Public records. Records which by law impart constructive notice of matters relating to land.

Q 

Quieting title. The removal of a cloud on title by proper action in a court.

Quitclaim. A deed which transfers whatever interest the maker of the deed may have in the
particular parcel of land.

R

Recording. The noting in the designated public office of the details of a properly executed legal document, such as a deed or mortgage, thereby making it a part of the public record, and thus by law imparting constructive notice of that document.

Reissue rate. A reduced rate of title insurance premium applicable in cases where the owner of the land has been previously insured in an owner’s policy by the insurer within a certain time.  In order to receive the reissue rate, the policy must be provided to the issuing insurance agent.

Release. A deed from the mortgagee or trustee of a deed of trust which releases specific property from the lien of the mortgage or deed of trust.

Restriction. Provision in deed or will or in a “Declaration of condition, Reservations and
Restrictions” which limits in some way the right to use land or convey its title. Examples are building setback lines and limitations to residential uses.

Riparian. Pertaining to the banks of a watercourse. The owner of land adjacent to a watercourse is called a riparian owner and the rights of the riparian owner related to that watercourse are called riparian rights.

S

Simultaneous issue. Simultaneous issuance of an owner’s policy and a mortgagee policy, or an owner’s policy and a leasehold policy, or owner’s policy to different insureds.  A reduced premium rate is applicable in such cases.

Subdivision. A tract of land surveyed and divided into lots for purposes of sale.

Subordination. The act of a creditor acknowledging in writing that the lien of the debt due from a debtor shall be inferior to the lien of the debt due another creditor from the same debtor.

T

Tenancy by the entirety or entireties. A form of ownership existing in many states where
husband and wife together are treated as an entity.

Tenants in common. Persons who are co-owners or residential interest in the same land. 
At death of a co-tenant, interest passes by will or by laws of intestate succession.

Testate. Having made a will. One who makes a will is known as the testator or testatrix.

Title. The sum of all the facts on which ownership is founded or by which ownership is proved.

V

Vendee. Buyer.

Vendor. Seller.

Vest. To become owned by.

W

Warranty deed. A deed in which the grantor warrants or guarantees that good title is being
conveyed.