chain of title

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Chain of title is the historical record of ownership transfers of a specific piece of property. The chain of title is imperative to establishing legal ownership of real estate, vehicles, patents, and other tangible and intangible property. State governments and some private companies have registry systems for titles which keep accurate records of ownership from the original owner onwards. When someone seeks to buy real estate or other property with a title, a title company should be hired to trace the chain of title to ensure the seller has valid ownership. If the seller did not have a valid title, the buyer could be paying for something worthless, and the individual with actual ownership or registration of title keeps the property. Often, individuals must go to court to resolve discrepancies in the chain of title, and many individuals buy title insurance which covers losses from imperfect titles. 

[Last updated in July of 2021 by the Wex Definitions Team]