An abstract of title—also known as a title examination, examination of title, title abstract, or title abstraction—is the legal history or chronology of a certain piece of real property. For example, an abstract of title includes a history of all the property’s owners, the period during which each owner held the title to the property, and all liens and encumbrances that affect title to the property.
An abstract of title is usually prepared for a mortgagee (bank or lender) or a purchaser of the property and is sometimes used to market the property to a potential buyer. An abstract of title is generally designed to identify and eliminate any clouds (claims) on the title. In contrast, a title report is merely used to facilitate the purchase of title insurance and is sometimes not as complete or reliable as an abstract of title.
In California, an abstract of title provides a comprehensive history of the legal ownership and claims on a piece of real estate. This document includes a chronological list of previous owners, the duration of their ownership, and any liens or encumbrances that may affect the property's title. The purpose of an abstract of title is to clarify the title's status and to identify any potential issues ('clouds') that could affect a buyer's or lender's interests in the property. It is often required by mortgage lenders and potential purchasers to ensure that the title is clear before proceeding with a loan or purchase. While a title report can also be used during the process of acquiring title insurance, it may not be as detailed or exhaustive as an abstract of title, and it is primarily intended to support the issuance of a title insurance policy rather than to provide a full title history.