Title comfort derives from an unbroken, explicable chain of transactions. A summary opinion is a conclusion, not the analysis that supports it.
Purchasers and lenders often ask whether title is clear. The more useful question is whether the chain of transactions leading to the current holder is complete, internally consistent and capable of explanation. Title comfort is a function of that chain, not of a summary conclusion.
Continuity of the chain
Each transfer in the chain should be traceable to a registered instrument, and each instrument should be consistent with the one before it in respect of extent, boundaries and the identity of the transferor. Gaps are common in older chains, particularly where devolution occurred by succession rather than transfer, and require documentary explanation rather than assumption.
Extent and identity of the land
Discrepancies between the extent recorded in instruments, revenue records and physical measurement are among the most frequent findings in diligence. They are not always fatal, but they must be reconciled before a purchaser can be confident that the land inspected is the land being conveyed.
- Examine revenue and mutation records alongside registered instruments.
- Check for statutory restrictions on transfer applicable to the category of land.
- Search for encumbrances, and confirm the period covered by each search.
- Verify capacity, authority and consents for every transferor in the chain.
- Inspect the property physically and reconcile occupation with the paper position.
Litigation and encumbrance history
Pending or concluded proceedings affecting the property, and the terms on which they concluded, form part of the title position. So do rights created without registration, including tenancies and licences, which are frequently discovered only through inspection and enquiry rather than through record searches.
Reporting usefully
A diligence report should state findings, their consequence and the options available: rectification before completion, an indemnity, a price adjustment, an insurance solution or withdrawal. Reports that catalogue observations without indicating consequence transfer analysis back to the client at the point they most need it done.
This article is general in nature and does not constitute legal advice. Title requirements vary by state and by category of land.
