----- Message from "Jason R.S. Cassady" <jcassady@doughertylawfirm.com> on Fri, 15 Dec 2006 13:56:54 -0600 -----

To:	"Real Estate Listserve" <realestate@iabar.org>
Subject:	Root of Title and Patents

We recently reviewed a new root of title abstract in a rural county
which did not include a Patent.  Based upon Title Standard 11.7 and Iowa
Code Section 614.36, we called the abstracter and asked for the patent
to be included.  We received a fax from the abstracter stating that they
did not find a patent and "sometimes patents were not recorded in this
county so for this reason we do not include patents in our abstracts."

In our title opinion, we required the seller to file a copy of the
patent, or provide us with a copy prior to closing.  We have since
received a letter from the seller's attorney (whose office is also an
abstract company in a neighboring county), asking us to waive our
requirement pursuant to Title Standard 1.1.

While we acknowledge that the likelihood of litigation is remote from
the government, we are not certain that this is something that is a
title objection so much as it is a defect in the abstract for not
meeting the definition of a root of title.

We read Section 614.36 to mean that any "right, title or interest of the
United States" is still in full force and effect.  So, failure to convey
would leave the government the true owner, or any restrictions placed on
the original conveyance would still be in full force and effect.

By the last sentence in the comment of Title Standard 11.7, states that
an abstract which is a root of title abstract "will show the patent".

The question we want answered is how other attorneys feel about the lack
of a Patent in relation to Title Standard 1.1.  Is this something that
can be overlooked as a remote issue not likely to cause litigation, or
is the abstract defective in that it does not represent a true root of
title abstract?

I've included Section 614.36 and Title Standard 11.7 below for anyone
who doesn't want to look them up.

Thank you in advance!

Jason

Jason R.S. Cassady, Attorney at Law
Dougherty Law Firm
801 North Avenue
Norwalk, IA 50211
Phone: 515-981-5401
Fax: 515-981-5517

Notice:  This e-mail (including attachments) is covered by the
Electronic Communications Privacy Act, 18 U.S.C. Sec. 2510-2521,
is confidential and may be legally privileged.  If you are not
the intended recipient, you are hereby notified that any retention,
dissemination, distribution, or copying of this communication is
strictly prohibited.  Please reply to sender that you have
received the message in error, then delete it.  Thank you.
--------------------------------------------------------------------

Section 614.36 Lessors, reversioners, and easements.

        This chapter shall not be applied to bar any lessor or lessor's
successor as a reversioner of the lessor's right to possession on the
expiration of any lease; or to bar or extinguish any easement or
interest in the nature of an easement, the existence of which is
apparent from or can be proved by physical evidence of its use; or to
bar any right, title or interest of the United States, by reason of
failure to file the notice herein required.

Title Standard 11.7

        Does the Marketable Title Act affect the length of the record title
chain for which all matters affecting the title must be shown by the
abstract?

STANDARD:

        Except as to matters which are excepted from the operation of the Act
under Iowa Code § 614.36, the abstract need extend no further beyond
forty years from the present time than is necessary to show the “root of
title.”  Beyond this point search should be confined to those interests
excepted from coverage by the Act (i.e., rights of reversioners under
leases, claims of the United States and easements which are apparent
from or can be proved by physical evidence of their use).  It is the
purpose of the Marketable Title Act to make the use of “forty-year
abstracts” standard throughout the state.

COMMENT:

        A major purpose of the Marketable Title Act is to limit the examination
of the record title to a relatively modern period, as reflected in the
forty-year chain requirement.  Consistent with this shortening of the
period of title examinations is the intent to reduce the record search
and shorten abstracts.  In all cases, the abstract must go back to the
conveyance or other title transaction which is the “root of title”.  It
will rarely occur that this instrument was recorded precisely forty
years prior to the present time.  In nearly every case the period from
the recording of the “root of title” to the present will be somewhat
more than forty years.  For example, E wishes to have an abstract of
title showing the forty-year title required to make title marketable
under the Act.  The only instruments of record are the following:  (1) A
patent from the United States to A recorded in 1900; (2) a deed from A
to B recorded in 1910; (3) a deed from C to D recorded in 1962; and (4)
a deed from D to E recorded in 1990.  In 2003 the deed from C to D is
the root of title since it is the last instrument recorded forty years
or more prior to the present time.  Thus, the abstract will show the
patent, to extinguish the original claim of the United States, and then
start with the deed from C to D.
   
 

_____________________________
To unsubscribe from this list, send a mail message to "mailto:listserve@iowabar.org"
with the following in the subject and body of the message:

unsubscribe realestate