Glossary of Escrow Terms

Following are terms commonly used by people performing escrow functions:


Abstract of Judgment -- A summary of the essential provisions of a court judgment, which when recorded in the county recorder's office, creates a lien upon the property in that county, both presently owned or after acquired.

Accommodation Recording -- The recording of documents with the county recorder by a title insurance company, without liability (no insurance) on the part of the company, but only as a convenience to a client.

Acknowledgement -- A written declaration by a person executing an instrument, given before an officer authorized to give an oath (usually a notary public), stating that the execution is of his or here own volition.

Administrator -- A person given authority by a proper court to manage and distribute the estate of a deceased person when there is no will.

Affidavit -- A written statement or declaration, sworn to before an officer who has authority to administer an oath.

After Acquired Title -- Legal doctrine by which property automatically vests in a grantee when the grantor acquires title to the property after the deed has been executed and delivered.

Agency -- One who is authorized to act for or represent another (principal), usually in business matters. Authority may be expressed or implied.

Alias -- Latin for (otherwise) commonly meaning that a person is known by more than one name. In some states, indicated by the letters AKA (Also Known As).

Alienation Clause -- A type of acceleration clause, calling for a debt under a mortgage or deed of trust to be due in its entirety upon transfer of ownership of the secured property. Also called a "due-on-transfer" clause.

A.L.T.A.(American Land Title Association) -- An organization, composed of title insurance companies, which has adopted certain insurance policy forms to standardize coverage on a national basis.

Amendment -- A change, either to correct an error or to alter a part of an agreement.

Amortization -- Payment of debt in regular, periodic installments of principal and interest, as opposed to interest only payments.

Amortization Schedule -- A schedule showing each payment of a loan to be amortized and breaking down the payment applied to principal and the amount applied to Interest.

Amortize -- To reduce debt by regular payments of both principal and interest, as opposed to interest only payments.

Assessed Value -- Value placed upon property for property tax purposes by the tax assessor.

Assessment District -- An area, the boundaries of which are set for tax assessment purposes only; these boundaries may cross city boundaries.


Beneficiary's Demand -- Written instructions by a beneficiary under a deed of trust stating and demanding the amount necessary for issuance of a reconveyance, whether a full or partial amount.

Beneficiary's Statement -- A statement by a lender under a deed of trust, setting forth the pertinent information necessary to assume said deed of trust, such as the unpaid balance, monthly payment, and interest rate.

Bill of Sale -- An instrument by which one transfers personal property.

Binder -- A report issued by a title insurance company setting forth the condition of title to certain property as of certain date, and also setting forth conditions which, if satisfied, will cause a policy of title insurance to be issued. Also called a commitment. A policy of title insurance (used primarily by investors) calling for a reduced rated for a future policy if the property is sold within a specified period.

Blanket Mortgage -- (1) A mortgage covering more than one property of the mortgagor, such as a mortgage all the lots of a builder in a subdivision. (2) A mortgage covering all real property of the mortgagor, both present and future.

Boot -- Something given in addition to. Generally used in exchange to refer to something .given other than the major properties to be exchanged, in order to equalize value.

Bulk Sale -- A transfer in bulk, not in the ordinary course of business, of all or substantially all of the inventory and fixtures of a business.


Cal-Vet Loans -- Real estate loans available to armed forces from California, at low interest rates.

Cancellation Clause -- A clause in a lease or other contract, setting forth the conditions under which each party may cancel or terminate the agreement. The conditions may be as simple as giving notice or complex and require payment by the party desiring to cancel.

Cashier's Check -- A check drawn by a bank on itself rather than on an account of a depositor. A cashier's check is generally acceptable to dose a sale without waiting for the check to clear.

Certificate of Eligibility -- A certificate obtained by a veteran from a Veteran's Administration office which states that the veteran is eligible for a V.A. insured loan. There is a list of requirements (when and how long the veteran served, type of discharge, etc.) which also may be obtained from the V.A. office.

Certificate of Occupancy -- A certificate issued by a local building department to a building renovator, stating that the building is in proper condition to be occupied.

Certificate of Sale -- Certificate issued to the buyer at a judicial sale (such as a tax sale), which will entitle the buyer to a deed upon confirmation of the sale by the court or if the land is not redeemed within a specified time.

Certified Check -- A personal check drawn by an individual, which is certified (guaranteed) to be good. The bank holds the funds to pay the certified check and will not pay any other checks drawn on the account if such payments would impede payment of the certified check. The bank also will not honor a stop payment on a certified check.

Chain of Title -- The chronological order of conveyance of a parcel of land, from the original owner (usually the government to the present owner).

Chattel -- Personal property.

Cistern -- A tank used for storing rainwater for use in areas where there is no water brought to the property by plumbing.

Closing -- (1) In real estate sales, the final procedure in which documents are executed and/or recorded, and the sale (or loan) is completed. (2) A selling term in which the client or customer is asked to agree to the sale or purchase and sign the. contract. (3) The final call in a metes and bounds legal description which "closes" the boundaries of the property.

Closing Costs -- Expenses incidental to the sale of real estate, such as loan fees, title fees, appraisal fees, etc.

Closing Statement -- The statement that lists the financial settlement between buyer and seller, also the costs each must pay.

Cloud on Title -- An invalid encumbrance on real property, which, if valid, would affect the rights of the owner. A cloud may be removed by quitclaim deed, or, if necessary, by court action.

Color of Title -- That which gives the appearance of good title, but actually contains some defect. For example: a conveyance given without the grantor having good title.

Commitment -- A Title insurance term for the preliminary report issued before the actual policy. Said report shows the condition of title and the steps necessary to complete the transfer of title as contemplated by buyer and seller.

Conditional Sales Contract -- A sale in which the title to property or goods remains with the seller until the purchaser has fulfilled the terms of the contract, usually payment in full.

Contingency -- Commonly, the dependence upon a stated event, which must occur before a contract, is binding. For example: the sale of a house, contingent upon the buyer obtaining financing.

Conveyance -- Transfer of title to land. Includes most instruments by which an interest in real estate is created, mortgaged, or assigned.

Counter Offer -- An offer (instead of acceptance) in response to an offer. For example: A offers to buy B's house for X dollars. B, in response offers to sell to A at a higher price. B's offer to A is a counter offer.

County Records -- Public recorded documents by which notice is given of changes to title, liens, and other matters reflecting real estate.


Deed -- Actually, anyone of many conveyance or financing instruments, but generally a conveyance instrument, given to pass fee title to property upon sale.

Deed in Lieu -- A deed from the owner (debtor) to a lender to prevent foreclosure. There are usually statutory provisions as to fairness of value and absence of coercion, which must be recited on the deed.

Deed in Lieu of Foreclosure -- A deed given by an owner/borrower to a lender to prevent the lender from beginning foreclosure proceedings. The validity of the deed depends to some degree on "fairness" under the circumstances, and adequacy of consideration, which will be considered.

Deed of Trust -- An instrument used in many states in place of a mortgage. Property is transferred to a trustee by a borrower (trustor), in favor of the lender (beneficiary), and reconveyed upon payment in full.

Deed Restrictions -- Limitations on the use of property placed in conveyance deed by the grantor, which bind all future owners.

Defective Title -- (1) Title to a negotiable instrument obtained by fraud. (2) Title to real property which lacks some of the elements necessary to transfer good title.

Delayed Reconveyance -- A reconveyance of a deed of trust which is issued and recorded after transfer of title and issuance of title insurance (not showing the deed of trust). Usually occurs when the lender is in another state and will not issue the reconveyance paid in full.

Demand -- (1) The quantity of goods that can be sold at a specified price, in a given market, at a particular time. (2) A letter from a lender showing the amount due in order to payoff a mortgage or trust deed.

Deposit -- (1) Money given by the buyer with an offer to purchase. Shows good faith. Also called earnest money. (2) A natural accumulation of resources (oil, gold, etc.) which may be commercially recovered and marketed.

Disclaimer -- (1) Statement on a publication attempting to limit liability in event the information is inaccurate. (2) Renunciation of a claim or right of another. (3) Refusal to accept an estate, either as trustee or as owner.

Documentary Tax Stamps -- Stamps, similar to postage stamps, affixed to a deed, showing the amount of transfer tax paid. Most states now "stamp" the deed rather than affixing a stamp.

Documentary Transfer Tax -- A state tax on the sale of real property, based on the sale price or equity transferred.

Dominant Tenement -- A parcel of land which benefits from an easement. For example: An easement exists over parcel A for access to parcel B. Parcel B is the dominant tenement; parcel A is the servient  tenement.


Easement -- A right created by grant, reservation, agreement, prescription, or necessary implication, which one has in the land of another. It is either for the benefit of land (appurtenant), such as the right to cross parcel A to get to B, or "in gross", such as public utility easement.

Easement Appurtenant -- An easement for the benefit of another parcel of land, such as the right to cross· parcel A to reach B. The easement will pass with the transfer of property to a new owner.

Easement in Gross -- An easement for the benefit of a person or company, rather than for the benefit of another parcel of land. Commonly, such easements as for public utilities.

Easement of Necessity -- An easement granted by a court When it is determined that said easement is absolutely necessary for the use and enjoyment of the land. Commonly given to landlocked parcels.

Egress -- A term concerning a right to come and go across the land (public or private) of another. Usually part of the term ingress and egress.

Encroachment -- Generally, construction onto the property of another, as of a wall, fence, building, etc.

Encumbrance, Incumbrance -- A claim, lien, charge or liability attached to and binding real property. Any right to, or interest in, land which may exist in one other than the owner, but which will not prevent the transfer of fee title.

Environmental Impact Report -- A report of the probable effect of a development on the surrounding area (environment). The report is prepared by an independent company to federal, state, or local guidelines.

Equitable Ownership -- Ownership by one whom does not have legal title, such as vendee under a land contract or, technically, a trustor under a deed of trust (legal title being in the trustee). Also called equitable title.

Escrow -- Delivery of a deed by a grantor to a third party for delivery to the grantee upon the happening of a contingent event. Contemporarily, in some states, all instruments necessary to the sale (including funds) are delivered to a third (neutral) party, with instructions as to their use.

Escrow Instructions -- Instructions which are signed by both buyer and seller, and which enable an escrow agent to carry out the proceeds necessary to transfer real property, a business, or other assignable interest.

Escrow Officer -- An escrow agent. In some states, one who has, through experience and education, gained a certain degree of expertise in escrow matters.

Estoppel -- The prevention of one from asserting a legal right because of prior actions inconsistent with the assertion.

Evidence of Title -- A document establishing ownership to property. Most commonly, a deed.

Execute -- To complete; to fulfill a purposes, such as to execute an instrument, meaning to sign, seal (contemporarily, to notarize), and deliver.


Farmer Home and Administration (FMHA) -- The federal agency which makes, participates, and ensures loans for rural housing and farms.

Federal Deposit Insurance Corporation (FDIC) -- The federal corporation which insures against loss of deposits in banks and, since 1989, in savings associations.

Federal Tax Lien -- A lien attaching to property for nonpayment of a federal tax (estate, income, etc.). A federal tax lien differs from other liens in that it is not automatically wiped out by foreclosing on a mortgage or trust deed recorded before the tax lien (except by judicial foreclosure).

Fee Simple -- An estate under which the owner is entitled to unrestricted powers to dispose of the property, and which can be left by will or inherited. Commonly, a synonym for ownership.

Fee Simple Absolute -- A term now used synonymously with fee simple.

F.H.A.(Federal Housing Administration) -- A federal agency which insures first mortgages, enabling lenders to loan a very high percentage of the sale price.

FHA Escape Clause -- A clause stating that the buyer (borrower) shall not be obligated to buy nor shall any deposit be lost if the appraisal is less than the agreed upon amount.

Fictitious Instrument -- An instrument (usually a mortgage or deed of trust) which is recorded not on specific property but to be incorporated by reference into future mortgages or deeds of trust. This is done by reference to the recording information of the fictitious instrument in the instrument recorded against specific property, This shortens the latter instrument and thereby cuts the cost of printing, paper, recording, etc. The fictitious instrument contains general language applicable to any specific property.

Financing Costs -- The cost and interest and other charges involved in borrowing money to build or purchase real estate.

First Refusal Right -- A right, usually given by an owner to a lessee, which gives the lessee a first chance to buy the property if the owner decides to sell. The owner must have a legitimate offer, which the lessee can match or refuse. If the lessee refuses, the property can then be sold to the offeror.

Flood Insurance -- Insurance indemnifying against· loss by flood damage. Required by Ienders (usually banks) in areas designated (federally) as potential flood areas. The insurance is private by federally subsidized.

Floor Time -- A period during the working day when a specific salesperson is responsible for general inquiring (walk-in or telephone) regarding properly in a brokerage office. This is generally established as a set, rotating number of floors per week for each salesperson. When a salesperson is "on the floor" he or she must be in the office or make arrangements with another salesperson to cover the floor during those hours.

FNMA (Fannie Mae) -- A private corporation dealing in. the purchase of first mortgages at a discount.

FNMA Buydown -- FNMA (Federal National Mortgage Association) accepts loans containing a buy down provision on single family residential, owner occupied properties. A prepayment (points) will buy a lower rate of interest during the first one to five years of the loan. Restrictions apply to the amount of the buydown and rise in payment amount as the loan progresses.

Forced Sale -- A sale which is not the voluntary act of the owner, such as to satisfy a debt, whether a mortgage, judgment, etc. The selling price of such a sale would not be considered market value.

Foreclosure Sale -- a sale of property used as security for a debt, to satisfy said debt.

Fraud -- A deception, intended to wrongfully obtain money or property from the reliance of another on the deceptive statements or acts, believing them to be true.

Free and Clear -- Real property against which there are no liens, especially voluntary liens (mortgages).

Frontage -- The linear measurement along the front of a parcel, that is, the portion facing a road, waterway, walkway, etc. that would be considered the most valuable measurement of the property.

Fully Amortizing Loan -- A loan of equal, regular payments, which cause the principal and interest to be completely paid by the due date.


Gift Letter -- A letter to HUD from the owner (giver) stating that a gift of money has been made to the buyer in order to purchase specific property. The relationship of the donor and recipient is stated, as well as the amount of gift.

Grant Deed -- One of the many types of deeds used to transfer real property. Contains warranties against prior conveyances or encumbrances. When title insurance is purchased, warranties in a deed are of little practical significance.

Grantee -- One to whom a grant is made, generally the buyer.

Grantor -- One who grants property or property rights.

Grantor-Grantee Index -- The record of the passing of title to all the properties in a county as kept by the county recorder's office. Property is checked, by tracing the names of the sellers and buyers (chain and title). Title companies usually have more efficient methods by keeping records according to property description, rather than people's names.

Ground Lease -- A lease of vacant land, or land exclusive of any buildings on it. Usually a net lease.


Hazard Insurance -- Real estate insurance protecting against loss caused by fir, some natural causes, vandalism, etc., depending upon the terms of the policy.

Hereditaments -- (1) Anything which could be considered real property. (2) Anything which may be inherited.

Home Warranty Insurance -- Private insurance insuring a buyer against defects (usually in plumbing, heating and electrical) in the home he has purchased. The period of insurance varies and both new and used homes may be insured.

Hypothecate -- To mortgage or pledge without delivery of the security to the lender.


Impound Account -- Account held by a lender for payment of taxes, insurance, or other periodic debts against real property. The mortgagor or beneficiary pays a portion of, for example, the yearly taxes, with each monthly payment. The lender pays the tax bill from the accumulated funds.

Ingress and Egress -- A right to enter upon and pass through land.

Installment Contract -- A method of purchasing by installment (usually monthly) payments. When referring to real property, it is usually called a land contract.

Insured Mortgage -- A mortgage insured against loss to the mortgagee in the event of default and a failure of the mortgaged property to satisfy the balance owning plus costs of foreclosure. May be insured by F.H.A, VA, or by independent mortgage insurance companies.

Involuntary Lien -- A lien, such as a tax lien, judgment lien, etc., which attaches to property without the consent of the owner, rather than a mortgage lien, to which the owner agrees.


Joint Protection Policy -- A policy of title insurance which insures both the owners and the lender under the same policy.

Judgment Creditor -- A person, corporation, etc., that has been awarded a money judgment by a court. Recording an abstract of said judgment would create a lien on real property owned by the judgment debtor in the county where the abstract is recorded.

Judgment Debtor -- A person, corporation, etc., against whom a money judgment has been awarded by the court.

Judgment -- The decision of a court of law. Money judgments, when recorded, become a lien on real property of the defendant.


Legal Description -- A method of geographically identifying a parcel of land, which is acceptable in a court of law.

Legal Owner -- The term has come to be used as a technical difference from the equitable owner, and not as opposed to an illegal owner. The legal owner has title to the property, although the title may actually carry no rights to the property other than a lien.

Legal Title -- Usually title without ownership rights, such as the title placed in a trustee under a deed of trust, or the title in a vendor under a land contract.

Letter of Credit -- A letter, usually from a bank, requesting a person or company to extend credit to a certain person or company and guaranteeing payment. Most commonly used in the purchase of good from another country. The letter may be revocable or irrevocable, but most parties insist on the irrevocable.

Lis Pendens -- A legal notice recorded to show pending litigation relating to real property, and giving notice that anyone acquiring an interest in said property subsequent to the date of the notice may be bound by the outcome of the litigation.

Loan Policy -- A title insurance policy insuring a mortgage or beneficiary under a deed of trust, against loss caused by invalid title in the borrower, or loss of priority of the mortgage or deed of trust.

Loan Servicing -- The bookkeeping and collection of a loan, It may be "done by the lender or by another for the lender.


Mechanic's Lien -- A lien created by statute for the purpose of securing priority of payment for the price or value of work performed and materials furnished in construction or repair of improvements to land, and which attaches to the land as well as the improvements.

Metes and Bounds -- Description of land by boundary lines, with their terminal points and angles. Originally metes referred to distance, bounds to direction; contemporaneity, the words have no individual meaning of practical significance.

Mineral Rights -- The ownership of the minerals (coal, gold, iron, etc.) under the ground, with or without ownership of the surface of the land.

Monument -- A visible, permanent object, marked by a surveyor, to indicate the boundaries of land. May be artificial, such as post, or natural, such as a tree or large stone.

Mortgage -- (1) To hypothecate as security, real property for the payment of a debt. The borrower (mortgagor) retains possession and use of the property. (2) The instrument by which real estate is hypothecated as security for repayment of a loan.

Mortgage Banker -- A company providing mortgage financing with its own funds rather than simply bringing together lender and borrower, as does a mortgage broker. Although the mortgage banker uses its own funds, these funds are generally borrowed and the financing is either short term or, if long term, the mortgages are sold to investors (many time's insurance companies) within a short time, in general mortgage.

Mutual Water Company -- A company in which the owners are the customers. Stock is issued to the users, who are the organizers of the company.


Non Judicial Foreclosure Sale -- Sale by a trustee under a deed of trust, or mortgage under a power of sale of a mortgage. There is no court (judicial) proceeding.

Notary Public -- One who is authorized by the state or federal government, to administer oaths, and to attest to the authenticity of the signatures. A federal authorization may extend the authority to attest to the authenticity of certain documents, and to act as a notary in foreign countries.

Notice of Action -- A recorded notice that property may be subject to a lien, or even that the title is defective, due to pending litigation. Notice of a pending suit.. Also called "Lis Pendens".

Notice of Completion -- A notice, recorded to show that construction job is finished. The length of time in which a mechanic's liens may be filed depends upon when and 'If a notice of completion is recorded.

Notice of Default -- A notice is filed to show that the borrower under a mortgage or deed of trust is in default (behind on the payments).


Offer -- A presentation of proposal for acceptance, in order to form a contract. To be legally binding, an offer must be definite as to price and terms.

Off-Site Improvements -- Development of land to make adjacent property suitable for construction. Includes sidewalks, curbs, streets, sewers, 'streetlights, etc.

Owner's Policy -- Title insurance for the owner of the property, rather than a lien holder.


Parcel Map -- A map allowed in some states as a substitute for a subdivision map for 1 to 4 parcels (lots) with no common area. The procedure is much simpler and less costly than creating subdivision map.

PI (Principal and Interest) -- Used to indicate what is included in a monthly payment on real property. If the payment includes only principal and interest, property taxes and hazard insurance would make the total payment higher.

PITI (Principal, Interest, Taxes and Insurance) -- Used to indicate what is included in a monthly payment on real property. Principal, interest, taxes and insurance are the four major portions of a usual monthly payment.

Point of Beginning (POB) -- A term used in metes and bounds descriptions. The description will start with the words "Beginning at a point" and end with "to the point of the beginning".

Power of Attorney -- An authority by which one person (principal) enables another (attorney in fact) to act for him. (1) General power -- Authorizes sale, mortgaging, etc. of all property of the principal. Invalid in some jurisdictions. (2) Special Power -- Specifies property, buyers, price and terms. How specific it must be varies in each state.

Preliminary Title Report -- A report showing the condition of title before a sale or loan transaction. After completion of the transaction, a title insurance policy is issued.

Prepayment Penalty -- A penalty under note, mortgage, or deed of trust, imposed when the loan is paid before it is due.

Private Mortgage Insurance -- Insurance against a loss by a lender in the event of default by a borrower (mortgagor). The insurance is similar to insurance by a governmental agency such as FHA, except that a private insurance company issues it. The premium is paid by the borrower and is included in the mortgage payment.

Public Records -- Usually at a county level, the records of all documents, which are necessary to give, notice. The records are available to the public. All transactions for real estate sales should be recorded.

Public Report -- A report given to prospective purchasers in a new subdivision, stating the conditions of the area (costs of common facilities, availability of schools, noise factor if near an airport, etc.) issued by the real estate commission.


Recital -- Setting forth in a deed or other writing some explanation for the transaction. For example: A deed may state that the property is being transferred in lieu of foreclosure.

Reconveyance -- An instrument used to transfer title from a trustee to the equitable owner of real estate, when title is held as collateral security for a debt. Most commonly used upon payment in full of a trust deed. Also called a deed of reconveyance or release.

Recordation -- Filing instruments for public record (and notice) with a recorder (usually a county official).

Recorded Map -- A map recorded in a county recorder's office. May be a subdivision map or describe a non-subdivided parcel. Reference to a recorded map is commonly used in legal descriptions.

Recorded Plat -- Subdivision map filed as a matter of public record.

Recorder's Office -- The county office where instruments are· recorded, giving public notice.

Recording -- Filing documents affecting real property as a matter of public record, giving notice to future purchasers, creditors, or other interested parties. Recording is controlled by statue and usually requires the witnessing and notarizing of an instrument to be recorded.

Recording Fee -- The amount paid to the recorder's office in order to make a document a matter of public record.

Regulation Z -- Federal Reserve regulation issued under the Truth-In-Lending Law, which requires that a credit purchaser be advised in writing of all costs connected with the credit portion of the purchase.

Request for Reconveyance -- A request by a beneficiary under a deed of trust to the trustee, requesting the trustee to reconvey the property (release the lien) to the trustor, usually upon payment in full.

RESPA (Real Estate Settlement Procedures Act) -- A federal statute effective June 20, 1975, requiring disclosure of certain costs in the sale of residential (one to four family) improved property which is to be financed by a federally insured lender.

Revenue Stamps -- Formerly federal tax on sale of real property. Canceled and replaced by state tax stamps. The stamps (similar to postage stamps) are affixed to the conveyance instrument (deed), or a rubber stamp is used to show the amount of tax.

Right of Way -- A strip of land, which is used as a roadbed, either for a street or railway. The land is set aside as an easement or in fee, either by agreement or condemnation. May also be used to describe the right itself to pass over the land of another.

Riparian -- Belonging or relating to the bank of a river or stream. Land within the natural watershed of a river or stream.

Riparian Owner -- One who owns land along the bank of a river or stream.

Riparian Rights -- Rights of an owner to riparian lands and water.

Running with the Land -- Usually concerned with easements and covenants. Passing with the transfer of the land.


Sales Kit -- Material carried by a salesperson to aid in listings and sale. This is the "tool kit" of real estate, containing forms, maps, tape measure, amortization schedules, pens, paper, etc.

Satisfaction -- Discharge of an obligation by payment of the amount due, as on mortgage, trust deed, or contract; or payment of a debt awarded, such as satisfaction of a judgment. Also the recorded instrument stating said payment has been made.

Secondary Financing -- A loan secured by a mortgage or trust deed, which lien is junior (secondary) to another mortgage or trust deed.

Settlement Statement -- A statement prepared~ by broker, escrow, or lender, giving a complete breakdown of costs involved in a real estate sale. A separate statement is prepared for the buyer and seller.

Short Form Document -- A document which refers either to another document not of record containing the total agreement, or incorporates by reference a document of record.

Simultaneous Issue -- A simultaneous .issuance by a little insurance company of policies insuring both an owner and a lender. The Lender's policy is issued at a reduced rate.

Special Assessment -- Lien assessed against real property by a public authority to pay costs of public improvements (sidewalks, sewers, streetlights, etc.) Which directly benefits the assessed property.

Standard Coverage Policy -- A title insurance policy used in several states, not having as broad coverage as the nationally recognized American Land Title Association (A.L.T.A.) policies.

Statement of Information -- A confidential form filled out by buyer and seller to help a title company determine if any liens are recorded against either. Very helpful when people with common names are involved. Also called a statement of identity.

Statutory Lien -- An involuntary lien (created by law rather than contract). Includes tax liens, judgment liens, mechanic's liens, etc.

Street Improvement Bonds -- Interest bearing bonds, issued by a local government, to secure assessments for street improvements. The owners of the property assessed may pay in a lump sum or pay installments on the bonds, including interest.

"Subject To" Clause -- A clause in deed, stating that the grantee takes title "subject to" an existing mortgage. The original mortgagor is alone responsible for any deficiency, should there be foreclosure of the mortgage. Differs from an "assumption" clause, whereby the grantee "assumes" and agrees to pay the existing mortgage.

Subordination Agreement -- An agreement by which an encumbrance is made subject (junior) to a junior encumbrance. For example: A loan on vacant land is made subject to a subsequent construction loan.

Substitution Agreement -- A document which is recorded to change the trustee under a deed of trust. A simple procedure 'in some states; more regulated in others.


Tax Deed -- (1) Deed from tax collector to government body after a period of non-payment of taxes according to statute. (2) Deed to a purchaser at a public sale of land taken for delinquent taxes. The purchaser receives only such title as the former owners had, and strict procedures must be followed to prevent attachment of prior liens.

Tax Lien -- (1) A lien for nonpayment of property taxes. Attaches only to the property upon which the taxes are unpaid. (2) A federal income tax lien. May attach to all property of the one owing the taxes.

Tax Roll -- A list, usually published by a county, containing the descriptions of all parcels in said county, the names of the owners (or those receiving the tax bill), the assessed value and tax amount.

Tentative Map -- A map submitted by a subdivider to a planning commission for approval; approval is usually conditioned upon charges. The final map, embodying the changes, is recorded.

Title Company -- An agency issuing the policy of a title insurance company.

Title Insurance -- Insurance against loss resulting from defects of title to a specifically described parcel of real property. Defects may run to the fee (chain of title) or to encumbrance.

Title Insurance -- Insurance against loss resulting from defects of title to a specifically described parcel of real property. Defects may run to the fee (chain of title) or to encumbrance.

Title Insurance Company -- A company which issues insurance regarding the title of real property.

Title Order -- An order for a search of title to some parcel of property, eventually leading to the issuance of a policy of title insurance.

Title Page -- The page in a subdivision map which is signed by all parties having an interest in the land, agreeing to the subdivision.

Title Plant -- A filing of all recorded information to real property, paralleling the records of the county recorder's office, although the filing system may be different.

Title Search -- A review of all recorded documents affecting a specific piece of property to determine the present condition of the title.

Transfer Tax -- State tax on the, transfer of real property. Based on purchase price or money changing hands. Check statues for each state. Also called the documentary transfer tax.


Underwriter -- One who insures another. A small title insurance company may buy insurance from a larger one (the underwriter) for all or part of the liability of its policies. A larger title company may buy part of the insurance from another company on high liability policies.

Unity of Title -- In joint tenancy, the holding by the joint tenants under the same title.

Unmarketable Title -- Not salable. A title which has serious defects.

Unrecorded Instrument -- A deed, mortgage, etc., which is not recorded in the county recorder's office and, therefore, not protected under recording statutes. Valid between the parties involved, but not against innocent third parties.


Vested -- Present ownership rights, absolute and fixed. Modernly, ownership rights, even though on a land contract or subject to a mortgage or deed of trust.

Voluntary Lien -- A lien placed against real property by the voluntary act of the owner. Most commonly, a mortgage or deed of trust.


Warranty Deed -- A deed used in many states to convey fee title to real property. Until the widespread use of title insurance, the warranties by the grantor were very important to the grantee. When title insurance is purchased, the warranties become less Important as practical means of recovery by the grantee for defective title.

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