Owning land, also known as real property, in the U.S. has always been revered. Ownership comes with a lot of pride especially since for most people it is their greatest asset. Because real property is valuable, many people want to claim ownership. Through the centuries, however, a parcel of property may change hands dozens of times. At any point along the chain of ownership, problems may arise casting a "cloud" over a title, putting a claim of ownership in doubt.

Early on, when a property was sold or transferred, conveyancers would establish the rights of title to a property based on public records searches. Conveyancers were typically not lawyers but they were recognized as an authority on real estate law. They would also search for any other rights, interests, liens or encumbrances that might exist with respect to the subject property.

Based on this search the conveyancer would provide a signed abstract of title to a potential buyer of the land even though title would not necessarily be cleared of any liens, rights or other encumbrances prior to conveying the property to new buyers or to a lender lending against the property. Since a conveyancer typically had limited resources and no insurance backing, the risk of losing a property due to unresolved issues was still significant. The need for title insurance arose from the fact that conveyancers did not provide adequate safety to the parties involved.

Next month's issue will discuss the landmark lawsuit which changed this method and brought on the need for title insurance. You will not want to miss it!