Title Insurance Definitions

Acknowledgement: A written declaration by a person executing an instrument, given before an officer authorized to give an oath (usually a notary public) stating that the execution is of the person’s own violation.

Adverse possession: Ownership or interest in land gained by a person other than the owner or record because of continued possession or use over a number of years, usually 18. (Requires court action to establish title.

Affidavit: A written statement made under oath, usually before a notary public, an authorized person, or an appropriate party.

Assignment of rents: Additional security taken, usually in connection with a mortgage or deed of trust, which pledges to the lender any income from rent or leases in addition to the actual property.

Break in the chain: A disruption of the logical order of recorded instruments affecting title to land.

Closing: The consummation of a transaction, whether it be a conveyance, encumbrance, or both, usually associated with the process of executing and delivering legal instruments and documents, exchanging
and/or disbursing moneys, etc.

Commitment (also called “commitment to insure”): A list of requirements of what must be done before a title company can insure a title as marketable or a loan as having a certain priority. By this document,
a title company is committing to issue a policy if all requirements are fulfilled.

Condominium: The concept of ownership of a single unit of air space within a multiple dwelling complex, together with joint ownership of the amenities (pool, greenbelts, etc.) and common areas of the structures and land among all unit owners.

Conservator: A court-appointed protector, guardian, or custodian of one’s personal affairs and property.

Conveyance: Transfer of Ownership

Deed of Trust: An instrument used in many states in place of a mortgage. Property is transferred to a trustee by the borrower, in favor of the lender (beneficiary), and released upon payment in full.

Encroachment: The extension of a structure beyond the property to which it belongs onto adjacent property.

Endorsement: A written change or modification of a title insurance commitment or policy.

Escrow: The act of placing something in the care of a third party until certain conditions are met, or placing trust in a third or disinterested party.

Exceptions: A list of encumbrances, burdens, or other interests over which a title company will not guarantee that the insured has priority.

Fee Title: Absolute ownership. (“In fee” means to own.”)

Financing statement: An encumbrance; one method of securing an indebtedness; a pledging of security.

Foreclosure: The process of exercising one’s rights to claim property, because of non-payment of a debt.

Improvement Location Certificate (ILC): A drawing made by a surveyor, based on the surveyor’s general knowledge of land boundaries and monuments, that shows the location of improvements, easements,
and encroachments.

Indemnity: A written statement that purports to hold harmless, guarantee payment in the event of loss, or protect against something. Ingress and egress: A right to enter upon and pass through land.

Joint tenancy: An undivided interest in property, taken by two or more individuals. The interests must be equal, occurring under the same conveyance, and beginning at the same time. Upon the death of a joint
tenant, interest passes by law to the surviving joint tenant(s), rather than to the heirs of the deceased.

Judgement: The final decision of a court resolving a dispute and determining the rights and obligations of the parties in a lawsuit. Legal description: The way property is described, named, and located by law.

Lien: A claim against property.

Life estate: An interest in real property reserved by or granted to an individual for the duration of his/her life.

Lis Pendens: Notice of pending legal action.

Marketable title: Title that is free from reason- able doubt of defect, which can then be readily sold or mortgaged.

Mechanic’s lien: A claim against property because of nonpayment for work performed or materials furnished.

Mineral Rights: Ownership of right to use or share in the minerals found in, on, or under lands.

Modification agreement: Instrument which changes or modifies a deed of trust or mortgage.

Mortgage: A pledging of property to a creditor as security for the payment of a debt or loan.

Mortgagee’s (title insurance) policy: A written statement of facts that guarantees and discloses, to the mortgagee, the priority of the mortgage and the current status of all other interests in the property.

Notary public: An official authorized by the State of Colorado to certify or attest documents.

Owner’s title insurance policy: A written statement of facts guaranteeing and disclosing the owner of the property and the current status of all other interests in the property.

Party wall: A common wall dividing two properties and shared by both.

Patent: An exclusive right and title to property as granted by the United States of America, or in some sections, the State of Colorado.

Personal representative: A person appointed by the court to administer the affairs of an estate.

Plat: A map, plan, or survey, usually showing a number of specific properties and how they are located in relation to each other.

Power of attorney: A written instrument made by one or more persons, called the principal(s), appointing another called the attorney-in-fact, to act for and in place of the principal(s).

Probate: The process of submitting and approving the will of a decedent and administering the decedent’s estate.

Quit Claim deed: A deed that conveys whatever present right, title, or interest the grantor may have.

Recording: Anything that is recorded or filed for public record with the Clerk and Recorder of the county. It is the standard method of public notice.

Requirements: Instructions by the title company of what must be done to comply with the law and with its own established underwriting procedures.

Restrictions or covenants: Limitations on or prohibitions of certain uses of real property.

Right of way or easement: In conveyances, these words are usually synonymous, meaning an interest in land that gives, grants, or reserves a privilege to a specific person or owner of property to enjoy a right on, over, or under the property of another.

Subdivision: A number of lots or plots divided out of a larger piece that has an organized map plan or plat to define it.

Survey: A professional determination of location and boundaries of property.

Tax certificate: A written statement from the county treasurer of the taxes due on a particular property.

Tax-free exchange or 1031 exchange: An exchange of real property for another real property of like-kind nature, thereby deferring, at the time of the exchange, capital gains liability. (Real property must be used for investment purposes or a trade or business.)

Tax lien: A claim against property by the government because of non-payment of personal taxes.

Tax sale: Public sale of property by the county treasurer because of delinquent taxes.

Tenancy in common or tenants in common): A type of co-ownership of real property where two or more persons hold undivided interests that need not be equal, with each person being entitled to possession of the property according to his proportionate share of ownership. Tenancy in common is distinct from joint tenancy because there is no right of survivorship.

Townhouse: A commonly accepted term for a property attached to other properties by virtue of a common wall.

Warranty deed: A legal document that conveys property from one party to another, by which the grantor warrants or guarantees the title to real property.

Disclaimer: This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is distributed with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal or accounting advice or other expert assistance is required, the services of a competent professional should be sought. © Copyright, 2020 by Land Title Guarantee Company. (001-0020)

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