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 North Dakota, an abstract of title is a document that provides a detailed history of the legal ownership and claims on a specific piece of real estate. It includes a chronological list of all previous owners, the duration of their ownership, and any liens, encumbrances, or legal issues that may affect the property's title. The preparation of an abstract of title is typically required during real estate transactions to ensure that the title to the property is clear and can be transferred without any legal disputes. This document is often necessary for the mortgagee (such as a bank or other lender) or the purchaser to evaluate the status of the property's title and to address any potential title defects, known as clouds, before completing the transaction. In North Dakota, title companies or attorneys usually perform the title examination required to create an abstract of title. The state statutes and regulations govern the standards and procedures for conducting a title examination and preparing an abstract. It is important to note that an abstract of title differs from a title report, which is typically less comprehensive and is used primarily for obtaining title insurance.