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 Minnesota, an abstract of title is a comprehensive document that outlines the history of a 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 typically prepared for parties with a vested interest in the property, such as a mortgagee (bank or lender) or a prospective buyer, and serves to identify and resolve any potential issues ('clouds') on the title. The purpose of an abstract of title is to ensure that the title to the property is clear and marketable. It is a crucial step in the real estate transaction process in Minnesota and is often required by lenders before they will issue a mortgage on the property. The abstract of title differs from a title report, which is generally used for obtaining title insurance and may not provide as detailed or thorough a history of the property's title.