Chain of Title

The chain of title is the historical record of a specific piece of property's ownership transfers. The chain of title is critical for establishing legal ownership of real estate, automobiles, patents, and other tangible and intangible property. State governments and some private companies have title registry systems that keep accurate records of ownership dating back to the original owner. When attempting to purchase real estate or other property with a title, a title company should be retained to trace the chain of title to ensure the seller has valid ownership. If the seller did not have a valid title, the buyer may be paying for something worthless, and the individual who has actual ownership or registration of title retains ownership of the property. Individuals must frequently go to court to resolve discrepancies in the chain of title, and many people purchase title insurance to cover losses from imperfect titles.