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What is a Chain of Title?

2016-09-26T10:13:04+00:00

The term 'Chain of Title' is included in the Laws & Regulations edition of the Financial Dictionary. Get yours now on amazon in ebook or paperback format. Read more here...

A chain of title refers to the consecutive historical transfers in a title on a particular piece of real estate property. These chains start with the current owner of the property and trace their way back to the property’s first owner. Reconstructing such a chain can be extremely important when a lender needs complete ownership documentation. Such title documents are generally kept by registry offices with local and municipal governments.

The field of real estate places tremendous importance on such a chain of title. Because it can be difficult to construct them, companies have come up with systems to track ownership and registration of real estate property. One of these is the Torrens Title system.

Insurance companies in the United States will provide title insurance on a property. They do this using the chain of title on real estate that the owners are transferring. These chains are so important that many title insurance companies will keep their own private title operations to track such titles so they do not have to rely on only official government records. In cases where it is difficult to come up with a complete chain, abstracts of title can be utilized. Attorneys will sometimes certify these.

Lack of a clear chain of title has caused significant problems during the Great Recession of 2008. These problems began when many lending companies made the choice in 1995 to use an electronic registry to hold the title. The best known company in this arena was MERS Mortgage Electronic Registration Systems. The banks tried to use this system so they could sell and purchase mortgages without needing to register ownership changes with the appropriate local governments. Without clear title chains, the banks were often not able to come up with the original titles needed to force foreclosures and evictions as individuals defaulted on their mortgages. A number of states throughout the U.S. sued the banks over these actions.

The chain of title is also utilized in intellectual property areas. With the film industry, they refer to documentation that demonstrates the ownership rights of a particular movie. These chains can be used in other creative endeavors in the movie business. If many individuals contributed to the creative work, authorship is owned by a large number of the writers. Film distributors and buyers must carefully examine these chains of title to know the proprietary rights or rights under license of the owner. This is also important with books and encyclopedias.

Documents on chains of title for films can include a number of other intellectual properties. Trademarks can be included. Musical copyrights often form part of these chains as well. Talent agreements are an important part of these. They provide the talent’s legal release to utilize their images, works, appearance, and personal rights in movies. This covers everyone from directors to actors to choreographers and cinematographers. There are even insurance policies that cover omissions and errors of movie producers who do not obtain sufficient chains of title.

Specific organizations compile these reports for copyright property on behalf of the movie studios. To do so, they consult with the U.S. Copyright Office regarding author claimants, screening searches, and registration renewal searches. This detailed work requires that records from the Copyright Office dating back to 1870 and extending to the present be consulted. There are also other databases and trade publications which have to be reviewed for possible ownership claims.

The term 'Chain of Title' is included in the Laws & Regulations edition of the Financial Dictionary. You can get your copy on amazon in Kindle or Paperback version. See more details here.