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 North Carolina, an abstract of title is a document that provides a detailed history of the legal ownership and claims on a specific piece of real estate. It includes a chronological list of all previous owners, the duration of their ownership, and any liens, encumbrances, or legal issues that may affect the property's title. This abstract is often required during real estate transactions to ensure that the title is clear and to identify any potential issues that could affect the new owner's rights to the property. It is typically prepared for the benefit of a mortgage lender or a prospective buyer to help in making an informed decision about the property. The preparation of an abstract of title is a thorough process that aims to reveal any 'clouds' or disputes on the title, which can then be addressed before the completion of a property transaction. In contrast, a title report is a less comprehensive document often used to support the issuance of title insurance, and it may not provide as complete a history as an abstract of title.