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 Florida, an abstract of title is a comprehensive document that outlines the history of a piece of real estate. It includes details about past ownership, the duration of each ownership, and any liens or encumbrances that may affect the property's title. The purpose of an abstract of title is to provide a clear picture of the legal status of the property and to identify any potential issues ('clouds') that could affect the transfer of title. This document is particularly important for parties involved in real estate transactions, such as buyers, sellers, and lenders, as it helps to ensure that the property title is clear before the completion of a sale or the issuance of a mortgage. While a title report is also used in the process of acquiring title insurance, it may not be as detailed as an abstract of title and is primarily intended to support the insurance underwriting process rather than to provide a full historical record of the property's title.