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 South 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, mortgages, or other encumbrances 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 legally transferred to a new owner. This process helps to identify and resolve any 'clouds' or potential claims on the title before the completion of a sale or the issuance of a mortgage. In South Dakota, title companies or attorneys often perform title examinations and prepare abstracts of title. The state's statutes and regulations govern the standards and procedures for conducting title examinations and preparing abstracts to ensure accuracy and reliability in the conveyance of property titles.