Illinois Title Insurance

Law and Practice

I. The History of Title Insurance
A. The System of Public Property Records
1. County Tract Books
a. Legal Description Indexes
b. Grantor-Grantee Indexes
2. Real Estate Tax Records
a. Property Taxes
b. Special Assessments
c. Federal and State Court Proceedings
B. Abstracting Real Estate Titles
C. Torrens Titles
D. Title Insurance
1. Commitment as a Summary of the Public Property
Records
2. Commitment as a Contract to issue a Title Policy
II. Process of Title Examination in the 21st Century
A. Commercial Title Plants
1. Indexing by Permanent Tax Index Numbers
2. Property Tax Information
a. Current and Past Due Taxes
b. Sold/Forfeited Taxes
3. Judgment and Name Searches
a. Federal and State Court Judgments
b. Federal and State Tax/Revenue Liens
4. Review of Documents in the Chain of Title
B. Use of Prior Title Evidence
C. Review of Court Proceedings
III. Title Commitment Structure
A. Impact of Effective Date
B. Determination of Party in Title
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 1. Analysis of Deeds in Chain of Title
a. Life Estates
b. Covenants and Restrictions
c. Reverters
d. Easements Reserved
e. Other Legal Description Issues
2. Tenancies
a. Tenants in Common
b. Joint Tenants
c. Tenancy by the Entireties
3. Review of Court Proceedings
4. Consideration of Prior Title Finding
5. Possibility of Hold Harmless Letter
6. Other Underwriting Considerations
C. Legal Description Considerations
1. Metes and Bounds (Un-subdivided Property)
2. Subdivided Property (Lot and Block Property)
a. Legal description of property to be subdivided
b. Required Signatures and Consents
3. Insurable Easements
a. Proper Naming of Grantor & Grantee
b. Identify Benefited and Burdened Property
c. Adequacy of Description of Easement
(i) Complete Legal Description
(ii) Survey or other Depiction
d. Execution by Owner of Burdened Property
e. Consent of Lender
f. Existing Easements vs. Newly Created Easements
4. Condominium Property
a. Condominium Declaration
b. Condominium Survey
c. Units properly created and identified
d. Parking Spaces
(i) Fee Simple

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 (ii) Exclusive Easement
e. Insurable Limited Common Elements
f. Bifurcated Condominium/Fee Simple Buildings
D. Schedule B Exceptions
1. Real Estate Taxes
a. Multiple Tax Parcels
b. Underlying or Undivided Tax Parcels
2. Exceptions that run with the Land
a. Building Lines
b. Easements
c. Deed Restrictions/Declaration of Covenants
d. Recorded Local Ordinances
3. Exceptions that affect parties in title
a. Mortgages/Trust Deeds
b. Judgments and Liens
(i) Affecting Seller or Prior Party in Title
(ii) Affecting Buyer
IV. Identifying and Resolving Issues in the Chain of Title
A. Defects in Recorded Documents
1. Incorrect Legal Descriptions
2. Mis-posting due to PIN number errors
3. Mis-identification of Grantor or Grantee
4. Recording in Wrong County
5. Marital Status Issues
B. Defects in Execution of Documents
1. Missing Grantors/Grantee
2. Notarization Issues
3. Signatures don’t match grantor name
4. Grantor not in the Chain of Title
a. Record Correcting Deed
b. Court Order
c. Affidavit clarifying changed circumstance
d. Record official instrument to correct error
C. Pending Proceedings That Affect Title

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 1. Decedent’s Estate
a. Executor’s or Administrator’s Deed Required
b. Supervised or Unsupervised Administration
c. Bond in Lieu of Probate Procedure
d. Effect of Closed Estate
2. Minor’s Estate
3. Guardianship Estate
4. Bankruptcy Estate
5. Dissolution of Marriage
6. Quiet Title
7. Partition
8. Specific Performance
D. Issues regarding order of recording
1. Documents not in the chain of title
a. Wild Deeds
b. Recording out of order
2. Dating of Documents
3. Execution date vs. notarization
4. Stale Documents
V. Conveyancing Documents in the Chain of Title
A. Deeds
1. Warranty Deed/Warranties of Title
2. Special Warranty Deed
3. Quit Claim Deeds
a. Trustee’s Deeds
b. Deeds by Court-Appointed Fiduciaries
c. Judicial Deeds
d. Land Trust Deeds
B. Issues with respect to Mortgages
1. Multiple parties in title
2. Corporation, Trust or LLC as Mortgagor
3. Homestead Issues
4. Statement of Indebtedness
5. End Loan vs. Construction Loan

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 6. Purchase Money Mortgages
7. Trust Deeds
8. Effect of Release on other Security Documents
C. Other Documents in the Chain of Title
1. Easements
a. Burdening or benefiting the property
b. Reciprocal easements
c. Perpetual or limited duration
2. Documents creating restrictions on use of the land
a. Deed Restrictions
(i) Life Estates
(ii) Reversionary rights
(iii) Covenants, conditions or restrictions
(iv) Pattern of Development
(v) Unenforceable Conditions
(vi) Historical Anomalies
b. Declaration of Covenants, Conditions and
Restrictions
c. Covenants created by Subdivision
d. Governmental Ordinances
VI. Examination of Involuntary Transfers of Title
A. Foreclosure of Mortgages or Trust Deeds
1. Forfeiture of Contract Purchasers
2. Levy on Judgments
B. Deeds in Lieu of Foreclosure
C. Mechanics Lien Foreclosures
D. Tax Deed Proceedings
E. Adverse Possession
F. Condemnation
VII. Role of the State of Illinois in Title Insurance
A. Regulation of Direct Operations
B. Regulation of Agent Operations
VIII. Role of American Land Title Association (ALTA)
A. Endorsement Language Standardization

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 B. Update Policy Coverages & Formats
IX. The Role of Endorsements
A. Extended Coverage Endorsement
B. Policy Modification Endorsements
1. Use of Personal Undertakings
2. Use of Title Indemnities
X. Common Title Policy Types and Policy Components
A. 2006 ALTA Owner’s Policy
B. 2006 ALTA Loan Policy
1. Covered Risks
2. Exclusions from Coverage
3. Conditions and Stipulations

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