Abstractors search the ownership of parcels. Depending on the type of order and the Abstractor they may search just current ownership or a full chain of ownership through 30-40 years, plus CCRs (Covenants, Conditions, and Restrictions). An Ownership Report, or Lien Search, is an example of a search product with just the current record owner searched from the date of their conveyance forward to the current effective date, without CCRs.
The purpose of an abstract is to discover any underlying risks that may affect the land and to highlight the relevant information. Examples of these underlying and complex risks include: tax liabilities and open liens. Keep in mind a lender requires security, potential clouds on title and encumbrances need to be raised on the abstract.
While the Title Searcher/Abstractor does not clear title matters, rather it is our job to highlight and present an undisturbed assessment to clients for analysis. Nevertheless, its useful and prudent to understand some some basic title clearance which we will also get into as we continue.
Below is the syllabus. You will get to these sections as you continue to scroll.
This is a informational only guide, for Illinois land searches and abstractors. The only research into this project has been from an Illinois perspective, and American Land Title Association best practices are subject to change. To the best of our ability resources will be cited appropriately. Please realize searching standards and abstracting standards are dependent where the parcel is located. **Not intended as legal advice**
The purpose for this guide is to share and disburse information to fellow searchers and abstractors. Standardization of Illinois search technique and best practices are keys in strengthening our profession.
Please forward and link this resource page. Any suggestions for updates or comments please email: firstname.lastname@example.org
MERS ServicerID - MERS Mortgage Search
MyTaxIllinois - Illinois & Fed Income Tax Lien Search
PACER - Bankruptcy and Federal Court Search
Title (general overview) - Wikipedia
Illinois Counties - All Counties and departments
Determine the scope of your research and understand what is being requested. What is the Property in Question (PIQ)? What is the land? Are you searching a fee simple or leasehold entity? Is this a residential or commercial search? What is the purpose of this order, namely refinance, purchase or special report
Where is the parcel? An abstractor must initially determine parcels being researched. This starts through searching the common address of the parcel through the Assessor website or even a County GIS portal. This will provide you a parcel number (Parcel Identification Number) for reference to back search against. Once a parcel number is obtained, Treasurer and Recorder research can begin which will allow an Abstractor to realize any related parcel numbers for PIQ
Is this a residential or commercial parcel and order? Residential and Commercial searches are similar. Both searches require: taxes searched, names searched and parcel searched. Commercial searches, require in addition, UCC searches and LLC/Corporate searches.
What is the purpose of the order? Purchase, Refinance or special Report. Different requirements are demanded based in part by how the Abstract is ordered.
A "Purchase" dictates to the Abstractor to look at Covenants, Easements and Restrictions (CCRs) running with the land and pull the Plat of Subdivision. The Abstractor would additionally, go from current date working backwards, pulling the last deed with Title Insurance consideration, in addition to open liens.
A "Refinance" dictates to the Abstractor to go from the most recent deed with transfer stamps and insurance and comb forward. The vesting deed will be pulled as well as any open liens and CCRs coming to the effective date of the search.
"Special Report", or an Accommodation Order. These could be anything that is a different from the standard "Purchase" or "Refinance" orders mentioned above. Examples of these types of orders include: ROW Searches and 50 Year Telecommunication Searches.
Recording a document puts the world on notice, keep in mind Illinois is a race notice state - recorded first into consideration first. Therefore, not only the record matters, but the matter by which documents are recorded are critical in the Abstracting process. Illinois is also a mortgage lien theory state, meaning the lender has a lien interest in the property but they do not have title to the property.
Title searching is an art. Knowing, how to identify the PIQ is part of the process. Search online or at the County Recorder Office for the land records of the property in question to identify the current vested owner. Each County Recorder Office is set up a little bit differently, the Recorder index is searched grantor/grantee or through PIN (Property Identification Numbers) search in the Chicagoland area.
Once the tract is identified through the County Recorder index, the Abstractor must trace back the title from the "Effective Date" or "Coverage Date" back through the Plat of Subdivision or to the last Warranty Deed depending on the search order. Each Grantor/Grantee needs to be tracked and traced properly to discern who has interest in the land otherwise there is a potential break in the chain and potential Cloud on Title. Pull all pertinent recorded documentation from the chain for analysis.
Two most common types of ownership. An abstractor will be searching either the Fee or Leasehold depending on request.
Leasehold - Requires rent be paid to the true property owner, and depending on the terms of the lease,
Fee Simple - Highest form of ownership. The owner has full and irrevocable ownership of the land and any buildings on that land; technically still leasing the land from the government with property taxes, subject to local zoning codes.
Tax Maps need to be looked at for each order to clarify and confirm PIQ. The legal description on the deed will reflect what is shown on the Tax Map Some Counties have Tax Maps tied into their County GIS portals. However, reliance on GIS only should be discouraged as it does not indicate any legal parcel information.
The County Map Department may have people on staff who can help in person. Request an official “Clerk’s Legal Description” if the legal is confusing, or contrary to evidence in further title research.
Understanding legal descriptions is critical and goes beyond the organization of this course. Three types of legal descriptions: 1) government rectangular description 2) platted description 3) metes bounds.
Government rectangular description. One needs to understand how to read Section/Township squares, then follow the description for the specific quarter section to find the Point of Beginning or sometimes the Point of Commencement, depending on how the legal description is written.
Platted description. This is situating a parcel side a Subdivision and into a Lot/Block format with the County Recorder.
Metes and bounds. Describing a parcel entirely based on surveyor calls within the Sec/Town/Range system described above.
An abstractor needs to be able to read a Plat of Subdivision and locate the PIQ laying within. A Plat of Subdivision will lay down setback lines as well, public utility easements, access easements, as well as. This is in addition to identifying parcels within the subdivision itself corresponding to property descriptions.
In the search process, the abstractor will pull the Condominium Plat as well as Declaration and subsequent amendments to allow for analysis and determination of Limited Common Elements. The Condominium Plat will layout the common areas and identify the Units within the condo, depending on the Declaration this could include parking spaces or storage units. Condos can levy special assessments in addition to, regular association dues.
An examiner will always need a Paid Assessment Letter (PAL) to verify no liens and assessments are due from the governing Condominium HOA. HOA's can place liens on new owners regarding previous owners HOA dues. Illinois, does not have a statute of limitation on HOA liens.
Rare, but more common in Chicago than other parts within Illinois. When someone purchases a Unit within a Cooperative they become a long-term shareholder of the corporation. This corporation owns the land, building and all common areas. What is recorded is a - LEASE. This lease the transferrable document between current owner and subsequent. A searcher and abstractor must also pull the organization declaration (coop dec) for the cooperative and any subsequent recorded declaration amendments.
One of the advantages of a cooperative is the privacy it gives the owner/tenant. For more information, National Association of Housing Cooperatives.
Joint Tenancy - Formed when two or more parties own an equal and undivided interest in a property. Right of survivorship exists within the join tenancy. Must have to form this tenancy: unity of possession, unity of interest, unity of time and unity of title
Tenancy in Common - Parties using this tenancy are free to pass along their interest to their heirs, no right of survivorship with other point parties in your tenancy. Tenants in Common may have unequal interests in the property. Tenancy in Common is the default tenancy IL-ALTA (Illinois American Land Title Association) in examining when tenancy is obscure or questionable.
Tenancy by the Entirety - Only married couples can own a tenancy by the entirety. Functions the same as joint tenancy with right of survivorship but requires a marriage. The married couple take possession at the same time, they can not transfer their interest in the property without the other spouses consent.
Warranty Deed - best type of deed a buyer can get. Contains the most warranties or guarantees, most comprehensive. With a Warranty Deed, the seller is committing that they have no liens on the property and conveying full ownership.
Special Warranty Deed could also be called a limited warranty deed - less protection, the grantor is guaranteeing to defend the title only to their own claims
Quitclaim Deed - offers no guarantees whatsoever, only conveying the interest in the property
Transfer on Death Instrument (TODI) - Popular after 2012 in Illinois. Must be recorded before the death of the record owner or join owners (all owners much sign or this is a ineffective TODI). Any liens or encumbrances would follow to the new record owner and do not become extinguished on previous owner's death. If the record owner sells the parcel before their death, the TODI is void.
Land Trusts - Recorded Trust deed. Organized by a unrecorded Trust Agreement that creates trust terms and assign beneficiaries. The benefit is allowing the owner to remain hidden in the public record. The Land Trust holder uses Powers of Direction to buy/sell or manipulate the trust.
Illinois Judgments and Liens
A quick overview on Illinois judgments and liens for abstractors
Judgments are a lien on property for 7 years after the a judgment is rendered. After the initial 7 year period, the same judgment can be extended for another 7 years but looses priority against other liens and judgments at this point. Judgments have a 20 year limit to when they are no longer enforceable. If no release has been recorded an Examiner and Underwriter will need a payoff from the plaintiff attorney to waive judgment.
The biggest lien and most common is unpaid taxes and as well as State and Federal Income Tax Liens, but that will be discussed in the next section. Below is a list of some other liens commonly seen when assessing the recorded record. An Abstractor must identify these liens and judgments in the historical record and pull them.
Mechanic Liens - One of the most common liens found recorded. These are liens for labor, services or materials in relation to a property. The lien must be recorded within 120 days of completion for work. Can be contractor or subcontractor filing a lien. These liens are out on time 2 years from recording.
Commercial real estate brokers Lien - Lien for real estate brokers for payment of services. Out on time 2 years from recording
Other common liens include
Building Liens, Municipal lien
Sanitary District Liens, Municipal lien
Garbage or Debris Liens, Municipal lien
Weed Cutting Liens, Municipal lien
General Property Tax Considerations
Generally these are in two installments, sometimes four installments in Southern Illinois. It is vital to understand property taxes accurately. Current year's property taxes as well as the previous five years of taxes need to be reviewed to make sure they have not been purchased by a tax buyer requiring redemption.
Read over the tax bill to determine if any line items denote Special Tax Assessments, or Special Service Areas are present. Sometimes a Special Service Area will be recorded or mentioned in the Recorder of Deeds search. Property taxes act as open liens for 20 years.
Illinois State and Federal Tax Liens Considerations
Current entities in title must have Illinois State Income Tax Lien and Federal Income Tax Lien searches. Luckily, in Illinois the search can be ran simultaneously with the same database on MyTaxIllinois.
UCC Search Considerations
Name search is essential in an abstract. Sometimes, liens are not properly recorded against the parcel at the Recorder’s office. Simply docket search the vested ownership and other interested parties at the Counties where the parcels are located. Be sure to search plaintiff and defendant.
County Clerk dockets will identify any pending lawsuits, lis pendens. Courts requiring verification include: Chancery, Probate, Divorce, Municipal, Tax Deeds and Bankruptcy.
For LLCs and Corporations, the Illinois Sectary of State Good Standing search needs to be ran to check for listed officer names in addition to pulling State “good standing” compliance record.
Trusts - Parcels in a trust, an examiner will require seeing the Trust Agreement, which will outline powers and beneficiaries.
Divorces - The divorce decree must be examined by an examiner to determine interspousal liabilities.
Regarding matters of probate and Powers of Attorney, scrutiny and caution is needed and an examiner should refer to an underwriter for assistance. All Probate records should be pulled if filed for review.
Two types of bankruptcies - Chapter 7 which discharge debt, and Chapter 13 which reorganizes debt. Bankruptcy does not clear recorded mortgages or judgments without a specific order. An examiner must see a specific order from a Bankruptcy Court.
Use PACER for a deep bankruptcy and Federal search.
Foreclosure analysis requires some skill. An abstractor, needs to pull proof of service as well as the filed Complaint and all motions/judgements. The Motion Summary Judgment is needed as well which should have the final order in the litigation. Additionally, the docket should be submitted to supplement for review as proof of work.
Illinois Corporations, LLCs, & Trusts
Examining and basic title clearance
Need to look at organization documents and make sure the Corporation is in Good Standing. Bylaws should be provided if they exist and a Corporate Resolution disclosing the purchase or sale of the property must be provided.
Other Corporation notes: Foreign (out of Illinois) entities need to be registered. Corporations are considered perpetual unless a termination date is provided in the organization documents
Limited Liability Corporations
Similar to Corporations, the LLC must be in good standing with the State of Illinois or reinstated. Examiners need to be conscious of who has authority to act. The following needs to be provided for examine:
Trusts are a popular estate planning tool to avoid probate. They are formulated with a Trust Agreement and facilitate a seamless parcel transfer.
Other Considerations In Entity Examining Include: