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 Arkansas, 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 often prepared for entities with a financial interest in the property, such as mortgagees (banks or lenders) or potential purchasers. The purpose of an abstract of title is to reveal any potential issues or 'clouds' on the title that could affect the transferability or clear ownership of the property. It is a more thorough investigation compared to a title report, which is typically used for obtaining title insurance and may not be as comprehensive. Arkansas law requires that any defects or clouds on the title be resolved before a property can be sold, and an abstract of title is a key tool in identifying such issues.