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 Pennsylvania (PA), an abstract of title is a document that provides a detailed history of a particular piece of real estate. It includes a record of past owners, the duration of their ownership, and any liens or encumbrances that may affect the property's title. This document is crucial for potential buyers or financial institutions to understand the legal status of the property's title and to identify any potential issues, known as 'clouds', that could affect the transfer of a clear title. The preparation of an abstract of title is typically done to ensure that the property can be transferred without any legal impediments, and it is often required by mortgage lenders before they will approve a loan secured by the property. While a title report can also be used during the process of purchasing title insurance, it may not be as comprehensive as an abstract of title, which is specifically designed to uncover any and all issues with the property's title history.