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

Stray Interests and the Chain of Title

Welcome title enthusiasts. As Steve Harvey might say . . . “we have a good one for you today.”

The term “chain of title” is probably the most widely recognized term in the title insurance industry. Chain of title and title examination walk hand-in-hand. And it is this chain of title that an examiner studies in preparing the title Commitment.

A chain of title consists of numerous links. Each time a particular parcel is conveyed, a new link is added. Ideally, this chain of title would have no flaws, often referred to as an unbroken chain of title. 

But, as the night follows the day, there are many occasions when a chain of title is not perfect, often referred to as a broken chain of title. The broken chain of title represents a workable issue for the title examiner; which issue must be resolved for the attainment of marketable title.

Stray Interests: Example

Fact #1: Lot 4 of Phillips Subdivision has an unbroken chain of title since its creation in 1970.

Fact #2: On May 1, 2014, Lot 4 was owned by A, B, and C.

Fact #3: On October 1, 2014, A and B convey to D.

Fact #4: On June 1, 2015, D attempts to sell to E. 

The title examiner, in researching the chain of title, will spot the October 1 conveyance from A and B to D. This conveyance should have included the interest of C, which it failed to do. The chain of title of Lot 4 is now broken. The interest of C will be considered a “stray interest,” as it was not properly conveyed through the chain. The examiner will use the title Commitment to call for proper termination of C’s interest, via deed or otherwise.

Note: a stray interest should not be confused with a “wild deed.” A wild deed is just that – usually a conveyance from a grantor who never appeared in the chain of title. Wild deeds are usually the product of improper drafting, such as the deed being drafted with the incorrect legal description. Conversely, stray interests concern parties who were part of the legitimate chain of title.

The chain of title represents the history of a parcel’s ownership. This chain flows from one link to the next, each link being inspected for flaws. Flaws represent stray interests . . . stray interests represent a broken chain of title. The examiner works to fix the break in the chain, thereby restoring the unbroken chain. Sounds like a Dr. Seuss compilation.   

Be great!

Dave Phillips ~ Examiner
State Street Title Agency

Lady Bird Deed

Land ownership is usually straight forward: Person A conveys to Person B. Person B now owns in fee simple.

There are, however, instances in which land ownership is not so straight forward, and the so-called “Lady Bird Deed” offers such instance.

In Michigan, the Lady Bird Deed is technically referred to as “The Life Estate With Power to Convey.” This post will discuss the creation and function of this estate.


The Lady Bird Deed is created in the following manner:

Grantor: Mrs. A

Grantee: Mrs. A, coupled with an absolute power to convey, sell, mortgage, or lease. If the property is not disposed of prior to her death, then to Child A and Child B, as tenants in common.


In the above example, Mrs. A conveyed to herself a life estate with power to convey. And it is truly a life estate coupled withpower to convey.

Mrs. A owns the life estate interest.

Child A and Child B own a contingent remainder interest. In property law, a contingent remainder interest is considered a present right to a future interest.

Child A and Child B’s interest is contingent on the actions of Mrs. A. If Mrs. A sells the property to a third-party, the interests of Child A and Child B are destroyed, as the contingency fails.

Conversely, if Mrs. A dies, without having sold the property, the land would vest in Child A and Child B, as the contingency has been met.


The Life Estate With Power to Convey (referred to as the Lady Bird Deed) is not so mysterious.

This tenancy affords the life estate holder free-flowing power, unencumbered by the interests of the contingent remainderman. And, practically speaking, there are only two possible results regarding this tenancy. Either the life estate holder conveys the land, destroying the interests of the remainderman, or the life estate holder dies without having conveyed, which transfers a fee simple interest to the remainderman.

The Lady Bird Deed is a contingent holding.

Be great.

Dave Phillips ~ Examiner
State Street Title Agency

Instruments of Conveyance

This article is written for Michigan land owners. In particular, I will be discussing a few of the instruments that are used to convey an interest in your land, as well as the actual interest these instruments convey. I feel that a basic understanding of these instruments can be of great assistance to the land owner with an otherwise layman’s understanding of property laws. This writing will touch on three such instruments: 1) the deeds; 2) the easement; and 3) the mortgage.

The Deeds

In the world of deeds, there are two main players: 1) the warranty deed, and 2) the quit claim deed.

The warranty deed is generally used to convey ownership of land. The warranty deed tells the purchaser that the seller owns the land, in fee simple, and that the seller is now conveying such fee simple interest to the buyer.

The quit claim deed is generally used to convey whatever interest the grantor has in the land. In other words, the quit claim deed makes no representation as to the legal interest of the grantor. The quit claim deed simply conveys to the grantee whatever interest the grantor holds. A common use of the quit claim deed is to clean up stray interests, or to convey interests from one owner to another.

When you purchased your land, you likely received a warranty deed from the seller. This deed acted as a promise from the seller that you were receiving actual ownership of the land.

The Easement

An easement may be defined as the right to use the land of another for a specific purpose. This right will usually not permit the easement holder to occupy or control the easement area. In other words, the easement holder cannot build on the easement area, or use the easement area in excess of its intention.

Easements are commonly obtained for : 1) access, and 2) utilities.

An owner of Parcel A may have to cross Parcel B to get to a main road. In order to accomplish this, the owner of Parcel A will request that the owner of Parcel B grant an “access easement” across the land of Parcel B. The owner of Parcel A will then have the right to cross this easement in accessing the main road. Remember, the owner of Parcel A will not be able to occupy of control this easement area, other than that stated in the easement agreement itself.

In our example, Parcel A is considered the dominant tenement, as the easement is for the benefit of Parcel A. Conversely, Parcel B is considered the servient tenement, as the easement burdens Parcel B.

The Mortgage

A mortgage is a grant of land to a lender, from the owner, for the purpose of securing the loan to the owner’s land. The mortgage is an instrument of security. Such mortgage will remain secured to the land until such time as it is paid off. And, of course, this loan may be foreclosed, by authority of the mortgage, should the owner become sufficiently delinquent on its payment schedule.

The land owner granting the mortgage is referred to as the mortgagor. The lender receiving the mortgage is referred to as the mortgagee.

In Michigan, the mortgage conveys a security interest only. This security interest may only ripen into a fee simple interest through the process of foreclosure.


All of the above material pertains to conveyances of an interest in land. An owner of land is conveying some interest to another. The instrument used will declare the legal interest actually conveyed. And, of course, any conveyance of an interest in land must be in writing, and preferably recorded; all designed to satisfy the statute of frauds.

© 2015 State Street Title Agency, LLC
All Rights Reserved

Tax Foreclosure: the Element of Due Process

In our last posting, we discussed the process of tax foreclosure as it relates to Michigan land. At the close of that article, I began to touch on the aspect of due process. Due process, or the lack thereof, will determine the quality of title actually purchased at the tax sale auction.

Wikipedia defines due process as: “the legal requirement that the state must respect all legal rights that are owed to a person.” In the context of tax foreclosure, due process is a constitutional guarantee that one will not lose their property without notice and an opportunity to be heard.

Notice and an opportunity to be heard is a commonsensical standard. An owner must first be notified of a court proceeding, followed by an opportunity to present his/her side. Due process can be considered a balance between government power and individual rights.

Due process and tax foreclosure

Before an actual tax foreclosure occurs, every person or entity with a legal right in the property must be notified of the proceedings. The legal rights are largely determined through a search of the public records. Notifications are sent to the respective parties at some point after tax forfeiture. Remember, the tax forfeiture is sort of like a batter in the on-deck circle. When this batter steps to the plate, foreclosure is up.

Now, by way of example

A pre-foreclosure search determines that Mr. A, Mr. B, Mr. C, and Mr. D have legal rights in blackacre.

Mr. A, Mr. B, and Mr. D are given proper notification of the proceedings; Mr. C is not notified.

A judgment of foreclosure is rendered and the property is sold at tax auction to Mrs. E.

Mrs. E then attempts to sell to Mrs. F.

Mrs. E approaches a title company in hopes of purchasing the Owner’s Policy for Mrs. F.

The title company is likely to deny coverage, at least up-front, on the basis of due process. The title company can not be certain that all necessary parties were given proper notification of the foreclosure proceedings. And, as our example shows, Mr. C was not afforded due process. As a result, Mr. C could wreak havoc on the newly acquired interest of Mrs. F. The interest of Mr. C has not been terminated. If the title company insures Mrs. F in fee simple, her policy is likely to be attacked.


The previous article discussed the process of tax foreclosure. This article discussed due process as it relates to tax foreclosure. The quality of title, following tax auction, is suspect. A title insurer will typically require a “quiet title” judgment in favor of the tax purchaser before it will agree to insure a sale out. Short of a quiet title judgment, the insurer must be made comfortable that all necessary parties were given proper notice of the foreclosure proceedings.

© 2015 State Street Title Agency, LLC
All Rights Reserved

Michigan’s Tax Foreclosure Process

In this article, I will hold your hand and walk you through the tax foreclosure process. It is my hope that an understanding of such process will allow some owners to avoid being foreclosed. Based on my experience, I feel that many people are foreclosed on simply because the whole process confuses them. It becomes overwhelming. And, once something becomes overwhelming, it seems human nature to bury your head in the sand.

The following depicts the foreclosure process:

Land Owner: Mr. A
Tax Year: 2012
Note: taxes are collected twice per year; in the summer and winter.

Mr. A has not paid his taxes for 2012. What happens next State Street title people?

Answer: the “delinquent” 2012 taxes are transferred from the municipality to the county in March of 2013. At this time the local municipality washes its hands of the matter. It is now up to the county to ramp up the pressure.

O.k., the delinquent taxes have transferred. What happens next State Street title people?

Answer: over the course of the next year, the county will send a series of notices to Mr. A requesting payment. Interest and penalties will accrue through this time. Assuming that Mr. A does not pay, what happens next State Street title people?

Answer: In March of 2014, the county will file a Certificate of Forfeiture citing the delinquent 2012 taxes. The forfeiture is procedural. Forfeiture must occur prior to foreclosure.

What happens next State Street title people?

Answer: Mr. A will have an additional year to cure the delinquency. In reality, Mr. A is given ample time to right the ship. Let’s assume that Mr. A does not pay.

What happens next State Street title people?

Answer: In March of 2015, Mr. A’s property will be officially foreclosed. After a 21 day redemption period, fee simple title will pass, by operation of law, to the foreclosing county. Game, set, and match. At this time, the interest of Mr. A has been legally terminated.

What happens next State Street title people?

Answer: Mr. A’s property will be sold at auction to the successful bidder.

To summarize, there is a full two-year period in which Mr. A had the opportunity to cure the delinquency. If he had cured, the county would have filed a redemption certificate regarding the certificate of forfeiture. I studied under Dr. Seuss.

It is important for the homeowner to understand that a “forfeiture” is not a “foreclosure.” The forfeiture precedes the foreclosure. My advise is to deal with the county during this time frame; do not run and hide.

Author Note:

In the environs of title insurance, tax foreclosure represents a two-part monster. Part one concerns the foreclosure process itself, as discussed above. Part two concerns the element of due process. And for the title insurer, as well as the purchasers at auction, due process is the Tricky Ricky. Because, until it can be shown that due process was afforded all appropriate parties, title to the land is typically considered uninsurable. And this is really grounded in the basis that the land, post auction, is not marketable.

For the tax investor, as well as the title insurer, it is a two-part formula ** Auction + Due Process = Marketable Title.

Revisit our site soon, as I will be discussing due process as it relates to tax foreclosure.

© 2015 State Street Title Agency, LLC
All Rights Reserved

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