DEFINITION of 'Chain Of Title'

The official record of ownership of a property or asset. The chain of ownership gets its name from its sequential nature; a chain of title traces historical title transfers from the current owner back to the original owner. Due to their critical importance in establishing ownership of a property or asset, rigorous and accurate title records are generally maintained by a centralized registry or system.

BREAKING DOWN 'Chain Of Title'

While the term is most commonly used in the real estate industry, chains of title are also found in the field of intellectual property such as film and music, as well as for intangible property such as farming or timber rights.

In a real estate transaction, the chain of title is researched on behalf of the buyer by a title company, which summarizes all title transfers and encumbrances in a title report. Title insurance is used by buyers to protect against financial loss ensuing from errors in the title report.

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