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 Indiana, an abstract of title is a comprehensive document that outlines the history of a piece of real estate. It includes a detailed account of the property's ownership, the duration of each owner's possession, and any liens or encumbrances that may affect the property's title. The preparation of an abstract of title is typically done for the benefit of a mortgagee or a prospective buyer, and its purpose is to identify and resolve any potential claims or 'clouds' on the title, ensuring that the title is clear for transfer. While a title report can also be used during the process of purchasing title insurance, it may not be as thorough as an abstract of title, as it is primarily designed to support the issuance of a title insurance policy rather than to provide a complete historical record of the property's title. Indiana state statutes and regulations would govern the specifics of how an abstract of title must be prepared, what it must include, and the legal implications of any findings within the abstract.