A summary provided by a title insurance company of public records affecting the title to a property. An attorney or a title company will review an abstract of title to determine if there are any problems affecting the title to the property. All such problems must be cleared before the buyer can be issued a clear and insurable title.

Such problems may consist of unpaid taxes on the property by the current owner or the previous owner. Also, judgements and liens are known to show up on the title as well, from loans that went into default where the property was being used as collateral.

If there are any such issues, they are normally cleared by the title company, that is why you pay them a nice chunk of change at the settlement table.

The majority of issues that show up on title usually have been cleared, but the appropriate paperwork was not handled correctly to remove the issues from the title.

Abstract of title also protects you from anything from the past that may sneak up on you. Such as a divorced spouse showing up at your doorstep claiming to have a right to your property because their ex had sold the house without their consent.

This is highly unlikely, but it has happened.

Abstract of title protects you from things that may have happened in the past affecting the property, the same way home owners insurance protects you from things that may happen in the future that affect the property.