Common Terms for Title Insurance
Abstract of Title is a compilation of instruments dating back to earliest public records and includes physical copies of all recorded instruments affecting title to lands being searched. An alternative method involves searching the records for 30 years from the date of a valid root of title.
Clear Title is a title free from defects which may encumber the owner’s right to the peaceful enjoyment of the property or which may cause the owner to lose any portion of it.
Cloud exists on the title when there is reason to believe there could be a future claim against the title to the property.
Closing Disclosure is a document that replaced other closing forms beginning August 1, 2015; specifically, the HUD-1, Good Faith Estimate (GFE) and the Truth in Lending Act (TILA) forms. This form will display the involved monetary amounts related to the closing.
Earnest Money is usually required from the buyer in order to show their sincerity in entering the contract to purchase property.
Easements as defined by the Florida Supreme Court are legal rights imposed on actual and physical property; a privilege without profit under which the owner of one property has a right to enjoy that interest over the property interest of another person. An easement is recognized as a legal right of the person using it.
Eminent Domain is the government’s constitutional right to take private property for public use and reimburse the record title holder for the reasonable cost of the land.
Lis Pendens is a formal notice of a pending law suit.
Primary Title Services should be recorded on the Closing Disclosure Form and include: evaluating the title search records; clearing underwriting obstacles; determining insurability; preparing and issuing the title commitment and title insurance policy. These charges are included in the title insurance premium.
Property Encroachment occurs when one person’s property extends onto the property of another. This can include fences, bushes, sheds, etc.
Related Title Services are commonly referred to as closing services and should be recorded on the Closing Disclosure Form. The examination of records is no longer a part of closing services as it is considered part of the primary title services. Closing services include: services performed by the licensee; preparing the documents for the closing; conducting the closing and disbursing the funds from the closing.
Restrictive Covenants prohibit, limit or regulate the use, character, kind, dimensions, specifications and locations of the buildings and structures that may be erected and maintained on the land.
Simple Escrow is a closing in which no title insurance is issued.
Title Commitment is a binder for title insurance.
Title Defects are competing or adverse interests in the property’s ownership, usually found upon an evaluation of the documents from the title search.
Title Search is the compiling of title information from official or public records. The title search provides a summary listing of all the past documents affecting title to the land being purchased.
Writ of Interpleader is a court order that directs the escrow holder (a title agency, company, or attorney) how to disburse the escrowed funds in question.
