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 Maryland, an abstract of title is a comprehensive document that outlines the history of a piece of real estate. This includes a record of past ownership, the duration of each ownership, and any liens or encumbrances that may affect the property's title. The purpose of an abstract of title is to provide a clear picture of the property's title history, ensuring that there are no 'clouds', or outstanding claims, that could jeopardize a clear transfer of title to a new owner. It is typically prepared for parties with a vested interest in the property, such as a mortgagee or a prospective purchaser, and can be used to demonstrate the marketability of the property. Maryland law requires that any defects or irregularities in the title be disclosed to potential buyers, and an abstract of title is a key tool in identifying such issues. Unlike a title report, which is often used in the process of obtaining title insurance, an abstract of title is usually more detailed and is considered a reliable document for verifying a property's title status.