Jun 23, 2018

What is a Title Plant

A Title Plant is not a big factory that produces property titles. Nor is it a flowering bush used in real estate transactions.

A Title Plant – also called an Abstract Plant – is an operation used as the basis for delivering title insurance. The main focus is on historical records organized by county. The Texas Department of Insurance oversees title plants and states they “shall consist of fully indexed records showing all instruments of record affecting lands within the county.”

A Title Plant is actually a collection of all documents that may impact title to real estate. Those records include files, documents, maps, plats, deeds, etc. filed with courts and tax authorities. They can include Probate, Civil, Bankruptcy court actions. The collection also contains any prior abstracts and/or attorney opinions.

While so much of the world is now digital, there are still a lot of documents stored in courthouses and title plants that are on paper. In-depth title scrutiny involves a lot more that your basic internet search or visit to the court. Databases are often not as complete as we like to think.

A title plant develops and maintains records of a property by both legal descriptions and name-indexes. That’s important because some judgments against a homeowner can be in only in the person’s name and not in property records. But they could legally encumber the property. On the other hand, who has the resources to research judgments against every person with the same common name ( for example, every John Doe)? A title plant is designed to find the documents that apply to that specific John Doe and a specific property.

Types of items a title plant can unearth include judgments, federal tax liens, mechanic’s liens, mortgages, divorce actions, probate records, deeds, etc. They must search back at least 25 years immediately prior to the date of the title search. Interestingly, death certificates are not recorded in their records and are not usually found by the title plant.

Title plants can be expensive to build and maintain. They are typically owned by a company, joint venture, or partnership. Some title companies own and operate their own title plants. Title companies in the Dallas/Fort Worth area with their own title plant include Texas Title, Great American Title, Rattikin Title, Carlisle Title, and American Land Title.

Other title companies “lease” access to a plant and use their services. Access fees for a title plant can be thousands of dollars a month for even a small title company. In Texas, a title company must include a title or abstract plant for each county in which they operate or main an office.

Why does Texas law require title companies to either own or lease a title plant? A plant is designed for the protection of the consumer. The title company is there to ensure that clear title is granted to the purchaser of property. If the ownership rights to property are unclear, the title insurance company will either remove those defects, accept the risk, or refuse to insure the title to the property. In this age of scams and cons, title insurance is more important than ever.

Title plants help reduce the cost of title insurance by reducing risk and the number claims. Since Texas title insurance rates are standardized, the state has an interest in preserving those rates. Title plants also collaborate with local recording authorities for the benefit of the consumer. It isn’t unusual to find county records with errors, missing or misspelled names or missing documents. Accurate information is crucial to the title plant. Filing the correct data with the county helps clear up any issues regarding the title history.

Title plants may not be pretty, but they are essential to the transfer and insurance of land titles in Texas. And they don’t require regular watering.

The opinions expressed are of the individual author for informational purposes only and not for the purpose of providing legal advice. Contact an attorney to obtain advice for any particular issue or problem.
[where: 75230]

No comments: