The Abstract of Title

Hello, my name is Alex Hunter.  I abstract for State Street Title Agency, LLC.  In this post I will outline the abstraction process.

My job as an abstractor is to dig through the public records, and pull relevant documents for the parcel of land that we are insuring.  This collection of documents is known as the abstract.  These documents can include deeds, mortgages, liens, easements and bankruptcies, as well as many other additional documents.

The first thing I do is hunt down the last deed of record.  This shows me who currently owns the property.  It is important that the owner listed on the deed matches our seller listed on the purchase agreement.  I also perform a name search for relevant parties.  I do this using a program called DataTrace, which is essentially a database of the public records, specifically designed for title use.

Next, I find the point of good title (POGT).  This is the point at which we can consider our title marketable.  Marketable title is simply title that is free from defect to the point that educated buyers would be inclined to purchase the parcel in question (for title-related reasons).  In some cases, the last deed of record is the POGT.

The main indicator I look for when searching for a POGT is a purchase money mortgage (PMM), with an accompanying warranty deed.  A PMM is simply a mortgage granted* by a purchaser to a lender, corresponding with a loan to finance the transaction.  The PMM, in most states, including Michigan, will take first lien position over other existing liens against the mortgagor**.  The accompanying warranty deed adds extra protection, as a title company most likely insured both documents.  I check the documents for signs that the transaction was insured by a title company as part of my search.

Once I find the POGT, I come forward through the chain of title, looking for any liens, open mortgages, or anything else of significance, while making sure our chain is unbroken.  I cross-check the information from DataTrace with additional searches on the county database.  Here, I search the property i.d., (also known as the parcel number or APN), the legal description of the property, and the relevant party names.  If I find any additional information, I note it in my abstract.

My final abstracts are hand-written.  I hand-write the chain of title from the point of good title forward, so we can see a brief chronological overview of the property history.  I list open mortgages, liens, easements, and any extra pertinent information.  I list the names I have searched, and list any additional liens that come up, if any, on those searches.

Once my abstract is complete, I hand it over to Dave Phillips, our title examiner, and he takes it from there.

*Note: mortgages are given to the lender by the borrower.  The mortgage is the document given to the lender that creates a lien on the property.  A mortgage is not actually a loan, but a document pledging real property in order to secure a loan.

**Note: a PMM will take priority over liens against the mortgagor, aka the buyer.  A PMM will not take priority over liens against other parties, including the seller.

State Street Title Agency, LLC
© 2019 All Rights Reserved

Lien Creation

The legal dictionary defines lien as: any official claim or charge against property. For a claim or charge to constitute a lien, it must materialize in one of three ways: 1) by consent; 2) by judicial determination; or 3) by statute.

Consensual Lien:

Consent is basic to human relations. Consent is granted from one individual to another. Example: a young man asks his girlfriend’s father for his daughter’s hand in marriage. The father, by giving his permission to the marriage, will have consented to the young man’s request.

In the context of a consensual lien, the consent is reciprocal by nature. I will use the real estate mortgage as our example of a consensual lien. The homeowner asks the bank to consent to a loan, while the bank reciprocally asks the homeowner to consent to the offering of its land as collateral for the loan. When both sides consent, there is created a consensual lien.

Judicial Lien:

Human relations frequently create disputes. Many times a dispute will require judicial resolution. The court may, at its discretion, allow for a lien to be placed on property of a litigant. This lien is certainly not consensual in nature.

The judicial lien is often found at the completion of divorce proceedings. Let us say that Mr. and Mrs. Property divorce. The property settlement agreement awards the property to Mrs. Property. However, the judge places a lien in the amount of $10,000.00 on Blackacre, now owned by Mrs. Property. This lien is in favor of Mr. Property. The judicial lien is true to its name; it is a lien, determined by a judge, to protect the interest of a litigant.

Statutory Lien:

Statutes are laws enacted by state legislatures. These laws, although influenced by court decisions, are not judge made. Example: The Michigan Construction Lien Act, which grants lien rights to unpaid contractors, does not require consent, nor does it require the contractor to initiate time-consuming and expensive litigation. The Michigan Legislature, in enacting the Michigan Construction Lien Act (the Act), had made a determination that a qualified worker should have a simple and inexpensive way of protecting itself from nonpayment. If the contractor fulfills the statutory requirements of the Act, he/she will have a valid lien on the property where work was contracted for and performed. A statutory lien is extremely powerful and beneficial to its holder.


Regardless of which method a lien arises, the proper establishment of a lien is critical. Once established, the holder has a legal interest in the subject property. Ultimately, this gives the holder viable leverage against the land owner. In today’s market, collecting on a debt can be quite an adventure. There are simply no guarantees that a debt will ultimately be satisfied. However, the establishment of a valid lien will greatly aid the holder in its efforts.

DP for State Street Title Agency, LLC
© 2018 All Rights Reserved

The Tenancy By The Entirety

The tenancy by the entirety can only be created in a husband and wife. At common law, and still today, the wife and husband are considered one unit; hence the term entirety.

Examples Creating a Valid Tenancy By The Entirety.

Grantees: Bill Smith and Mary Smith, husband and wife.

Grantees: Bill Smith and Mary Smith, his wife.

Grantees: Bill Smith and Mary Smith, as tenants by the entirety.

Grantees: Mary Smith and Bill Smith, her husband.

There are no magic words necessary to create a tenancy by the entirety. The only requirement is for the conveyance to properly indicate the married status of the grantees therein.

The tenancy by the entirety, the joint tenancy, and the joint tenancy with full rights of survivorship all offer the element off survivorship. However, the big difference between the tenancy by the entirety and the joint tenancy estates is that of severance. Joint tenancy estates may be severed by the conveyance of a co-owner to a third-party. Conversely, a tenancy by the entirety cannot be severed by the unilateral action of only one spouse attempting to convey to a third-party. A discussion of severability follows.

Severance of the Tenancy By The Entirety.

Example: Blackacre is owned by Bill Smith and Mary Smith, husband and wife.

Subsequently, Mary Smith attempts to deed her interest to Dave Phillips, a third-party. This conveyance would be invalid. Mary cannot unilaterally sever the tenancy by the entirety. For Dave Phillips to acquire legal ownership, Bill Smith and Mary Smith, as husband and wife, would have to convey.

*There is one exception to this rule: one spouse, acting alone, may convey its interest to the other spouse, thereby destroying the tenancy by the entirety. In fact, this is a very common occurrence.

Example: Blackacre is owned by Bill Smith and Mary Smith, husband and wife. Subsequently, Mary Smith deeds her interest to Bill Smith.

Resulting State of Title: Bill Smith.

Either spouse may freely convey its interest to the other.

Death of a spouse severs the tenancy by the entirety. When a spouse dies, the remaining spouse survives to the interest of the decedent. View the following example.

Original State of Title: Mark Thompson and Marge Thompson, husband and wife. Subsequently, Mark Thompson dies.

Resulting State of Title: Marge Thompson, survivor of herself and her deceased husband, Mark Thompson.

You may be wondering how someone can survive themselves. Remember that with a tenancy by the entirety, the spouses are considered to be one unit owning the whole. This verbiage simply indicates a continuation of the whole by the surviving spouse. The surviving spouse will then hold title in fee simple absolute.

The tenancy by the entirety is not a complicated estate. Whether the transaction is a sale or finance transaction, both spouses must act in concert. Unilateral action of one spouse is invalid.

State Street Title Agency, LLC
© 2018 All Rights Reserved

The Joint Tenancy

As with the tenancy in common, the joint tenancy is created in two or more grantees. The following example demonstrates how a joint tenancy is created by deed:

Example: A, owner of Lot 10 of Thompson Subdivision, conveys to B and C, as joint tenants. Notice the words used after C. The words “as joint tenants” must be used in the body of the deed to effectively create the estate of joint tenancy.


As with the tenancy in common, all joint tenants have the right to occupy and use the premises on equal footing with the other tenants. Unlike the tenancy in common, joint tenants are not free to apportion their ownership interests. In other words, you can’t have Bill Smith owning a 75% interest and Bob Jones owning a 25% interest when the holding is in joint tenancy. The reason is that the joint tenancy is considered “a whole.” Each tenant is an equal part of the whole. Thus, to apportion ownership interests would fly in the face of the purpose of a joint tenancy.

Conveyance by co-tenant.

When property is held in joint tenancy, a conveyance by one joint tenant will act to sever the joint tenancy.

Example: Let’s say that Bill Smith and Bob Jones hold title as joint tenants. Subsequently, Bill Smith decides to convey his interest to Pam Thomas.

How does this conveyance affect the joint tenancy?

This conveyance severs the joint tenancy and renders a “tenancy in common” between Bob Jones and Pam Thomas. It’s a bit tricky, but something a homeowner should be aware of. The joint tenancy can be severed by the conveyance out from an existing joint tenant.

Death of co-tenant. 

The unique characteristic of a joint tenancy is the survivorship element. Let me demonstrate this using the following scenario.

Title is held by Bill Smith and Bob Jones, as joint tenants.

Bill Smith subsequently dies. At this moment, full ownership of the property will be held by Bob Jones. Remember that Bill and Bob, as joint tenants, are considered owners of the whole. When Bill dies, Bob Jones continues on as the owner of the whole.

The joint tenancy allows the parties to avoid probate of a deceased joint tenant. Compare this result to that of the tenancy in common, in which an estate will be opened concerning a deceased. This is the main reason that most people desire the joint tenancy form of ownership.

State Street Title Agency
© 2018 All Rights Reserved

The Tenancy in Common

There are thousands of land sale transactions annually across the great State of Michigan. The vast majority of these transactions involve residential land. People will be purchasing these lands, and most will not have experience or expertise in the area of property law. In particular, they may not understand the implications of the way in which they hold title; title being synonymous with ownership. Purchasers of land, as well as all real estate professionals, should be aware of some basic facts regarding the tenancies that are available to owners.

There are 4 tenancies that I will cover in 4 articles. These tenancies are: 1) the Tenancy in Common; 2) the Joint Tenancy; 3) the Joint Tenancy With Full Rights of Survivorship; and 4) the Tenancy By The Entirety. This article will cover the first of these; the tenancy in common.

If you are buying land, what you learn from this writing can be used in discussing your options with your attorney. Once you and your attorney have decided on a tenancy that is proper for your situation, the deed to your land can be drafted properly and, most importantly, the deed will satisfy your intentions.

The Tenancy in Common

A tenancy in common is created in two or more grantees.

The following two examples demonstrate how a tenancy in common is created by deed:

#1: A, owner of Lot 1 in Smith’s Subdivision, conveys to B and C. This creates a tenancy in common held by B and C.

#2: A, owner of Lot 1 in Smith’s Subdivision, conveys to B and C, as tenants in common. This also creates a tenancy in common.


Tenants in common are, in fact, tenants in common. They share a common tenancy. Each tenant has the right to occupy and use the premises on equal footing. It is also assumed that each tenant holds an equal ownership share in the property. In other words, two tenants would each own a 50% interest. However, tenants in common are free to apportion interests. For example, title can be held by Bill Smith, as to a 75% interest, and Bob Jones, as to a 25% interest. It is up to the tenants to decide.

Conveyance by co-tenant.

As a co-tenant in a tenancy in common, you have very little control over the actions of a fellow co-tenant. He or she may convey their interest to another, leaving you with a new co-tenant. Whether this transfer will benefit or burden the remaining co-tenant is pure chance, but you must understand that your co-tenant(s) may change throughout your ownership period.

Death of co-tenant.

Let’s say that Bill Smith and Michael Thomas hold title as tenants in common.

Bill Smith subsequently dies. What happens to Bill’s interest and how does this affect the title?

Answer: Bill’s undivided ½ interest would pass to his estate. It would then be up to probate proceedings to administer Bill’s estate. Michael’s new co-tenant will be determined through such proceedings. Again, whether the successor to Bill’s interest benefits or burdens Michael is pure chance.

**Male ownership and dower.

As of April 6, 2017, dower is abolished in Michigan. Now, a married man who holds title individually, or as a tenant in common with another, may convey his land free of any dower right previously held by his wife.

State Street Title Agency, LLC
© 2018 All Rights Reserved