Terminology
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MARKET VALUE: An average between the highest price which a buyer, willing but not compelled to buy, would pay and the lowest price a seller, willing, but not compelled to sell, would accept.
MARKETABLE TITLE: A title which is free from encumbrances and any reasonable doubt as to its validity, and such as a reasonably intelligent person, who is well informed as to facts and their legal bearings, and ready and willing to perform his contract, would be willing to accept in exercise of ordinary business prudence. Sinclair v. Weber, 204 Md. 324, 104 a.2d 561, 565.
MARSHALING: Arranging, ranking, or disposing in order; particularly, in the case of a group or series of conflicting claims or interests, arranging them in such an order of sequence, or so directing the manner of their satisfaction, as shall secure justice to all persons concerned and the largest possible measure of satisfaction to each. Equitable doctrine of "marshaling" rests upon principle that creditor having two funds to satisfy his debt may not, by his application of them to his demand, defeat another creditor, who may resort to only one of the funds. Columbia Bank for Cooperatives v. Lee, C.A.N.C., 368 f2d 934, 939.
MEANDER: To follow a winding course.
MECHANIC'S LIEN: A lien on real estate, created by operation of law, which secures the payment of debts due to persons who perform labor or services or furnish materials incident to the construction of buildings and improvements on the real estate.
MEETING OF MINDS: The state that exists when all parties to a contract agree to the exact terms thereof.
MERGER OF TITLE: Absorption of one estate into another, a uniting of different interests in a parcel of property into one ownership.
MERIDIANS: Imaginary north-south lines that intersect base lines to form a starting point for measurement of land.
METES AND BOUNDS: A land description in which boundaries are described by courses, directions, distances, and monuments.
MONUMENT: Object or mark used by a surveyor to fix or to establish boundaries or land location.
MORTGAGE: (From the latin terms "mors" or "mort" meaning death or dead.) A temporary and conditional pledge of property to a creditor as security for the payment of a debt which may be satisfied or canceled by payment.
MORTGAGE BOOK: A book in the public records in which mortgages are recorded.
MORTGAGEE: The holder of a mortgage. The party to whom a mortgage is made.
MORTGAGEE POLICY: (Sometimes called a mortgage policy.) A policy of title insurance insuring the holder of a mortgage against loss occasioned by the impairment or invalidity of the lien of the mortgage or because of defects in, superior liens upon, or unmarketability of the title.
MORTGAGOR: A person who mortgages property. A person who executes a mortgage.
MULTIPLE LISTING: The pooling, in a central bureau, of listings of properties for sale, which listings are held individually by members of a group of real estate brokers, with the agreement that any member of the group may sell the properties and in case of a sale, the commission will be divided among the broker making the sale, the broker who filed the listing, and the bureau.
MUNIMENT OF TITLE: (1) Documentary evidence of title. The instruments of writing and written evidences which the owner of lands, possessions, or inheritances has, by which he is enabled to defend the title of his estate. (2) The records of title transactions in the chain of title of a person purporting to create the interest in land claimed by such person and upon which he relies as a basis for the marketability of his title commencing with the root of title and including all subsequent transactions. Black's Law Dictionary, 5th Edition.
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Security Title Company of Montana
600 South 19th Avenue
Bozeman, MT 59718
NEGLIGENCE: The omission or neglect of reasonable precaution, care or action.
NEGOTIABLE: Capable of being legally transferred by endorsement from one person to another, such endorsement carrying with it, without written provisions, implications of certain contractual obligations.
NEGOTIABLE INSTRUMENT: Instrument, e.g., a promissory note or check meeting certain legal requirements, that allows it to circulate freely in commerce.
NET LISTING: The listing, with a broker, of real estate for sale for a specified price, net to the seller, exclusive of commission and closing costs.
NOMINEE: Party designated to act in place of the original buyer in a real estate transaction. Does not act on own behalf, but as trustee for real party.
NON-INTERCOURSE ACTS: The refusal of one state or nation to have commercial dealing with another. Similar to an embargo. Generally relates to Indians and dealings with Indians.
NOTARIZE: To prove execution of a document by means of a notary public's certificate of acknowledgment.
NOTARY PUBLIC: A person authorized by law to take acknowledgments and to administer oaths.
NOTE: An instrument containing an express and absolute promise of signer (i.e. maker) to pay to a specified person or order, or bearer, a definite sum of money at a specified time. Two party instrument made by the maker and payable to payee which is negotiable if signed by the maker and contains an unconditional promise to pay sum certain in money, on demand or at a definite time, to order or bearer. U.C.C. Sec. 3-104(1). A note not meeting these requirements may be assignable but not negotiable. Black's Law Dictionary, 5th Edition. (See "Promissory Note.")
NUISANCE: Anything that is offensive and works an injury or harm to a person or property. May be either a public nuisance (offends the general public) or a private nuisance (offends one property owner.)
NUNC PRO TUNC: "Now for then" a tardy act made retroactive to take effect as of the time it should have been done.
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Security Title Company of Montana
600 South 19th Avenue
Bozeman, MT 59718
OBLIGATION: That which a person is bound by a promise, contract or by law to do.
OFFICIAL RECORD BOOK: One of a set of books in the public records in which is recorded all papers filed for record. Such books supplant deed books and mortgage books.
OPEN-END MORTGAGE: A mortgage (or deed of trust) that, in addition to the original obligation, secures additional advances made by the lender after the date of execution of the mortgage. Additional advances may be either optional or obligatory. (See, also "Future Advance Clause.")
OPINION: In the title industry referred to as title opinion. The conclusion and judgment of a skilled person as to the status of a title, based upon a title examination.
OPTION: A right, given for consideration, to purchase or lease a parcel of property within a specified time and on specified terms.
ORDER CONFIRMING SALE: A court order confirming sale of estate property.
ORDINANCE: A legislative enactment by a city or county.
OVERRIDING ROYALTY: An interest in oil and gas to be produced that a lessee may retain when executing an assignment of an oil and gas lease.
OWNER'S POLICY: A policy of title insurance usually insuring an owner of real estate against loss occasioned by defects in, liens against, or unmarketability of the owner's title.
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Security Title Company of Montana
600 South 19th Avenue
Bozeman, MT 59718
PARCEL: Any area of land contained within a single description.
PAROL: Orally, by word of mouth. For example, if a landowner gives another verbal permission to gather firewood from his land, or permission to hunt game thereon, that verbal permission would be called a parol license. Also, a witness who testifies by word of mouth in court is said to give parol testimony as contrasted to written evidence which may be introduced in the case, such as original deeds, wills, correspondence, or other documents.
PAROL GIFT: A gift made orally, by word of mouth as contrasted to one made in writing.
PARTITION: In the title industry, a lawsuit between joint owners of real estate in which the court either divides the property between them or orders the property sold and divides the proceeds between them.
PARTNERSHIP: A voluntary association of two or more persons to carry on as co-owners of a business for profit. May be either a general partnership or a limited partnership.
PARTY WALL: A wall built along the boundary line of adjoining properties and shared by the respective property owners or tenants.
PATENT: 1) (noun) A conveyance, by the federal government, of title to a portion of the public land. (2) (adjective) Apparent, obvious, open to view. (See, also "Latent.")
PERCENTAGE LEASE: A lease of property in which the rental is based upon the volume of sales made by the lessee on the leased property.
PERIMETER: (1) The boundary lines enclosing a tract of land. (2) The length of the boundary lines enclosing a tract of land.
PERPETUITY: The taking of property out of the channel of commerce by limiting its capacity to be sold for a period of time longer than that of a life in being plus 21 years and a period of gestation. It is the condition of an estate limited so that it will not take effect or vest within a period fixed by law. Also called the "Rule Against Remoteness of Vesting."
PERSONAL PROPERTY: Temporary or movable property as distinguished from real estate.
PERSONALTY: Personal property.
PLAINTIFF: The party initiating an action.
PLANNED UNIT DEVELOPMENT: A planned unit development ("PUD") is a project in which, typically, the buildings are built in styles that are sometimes referred to as "cluster housing." PUD is a concept according to which housing, typically a group of townhomes, patiohouses, or row-houses, is built with minimal ground space or yards surrounding each dwelling. The ground which would normally constitute the yard for each dwelling is consolidated into a larger recreational or greenbelt area. This area usually also includes all walks, drives, and parking areas. The individual dwellings and, possibly, a small patio, flower bed, or similar minimal ancillary personal use site, which may be owned with the residence, are individually owned. All of the ancillary land, such as recreation areas, greenbelts, walkways and others ("common area") are owned as an undivided interest, usually indirectly, with others. Because of the typical land ownership divisions, the unit owners are granted easements appurtenant (running with the land) foringress, egress, parking, and recreational use over the common area; otherwise the units would be landlocked.
PLAT: A map of a town, section, or subdivision showing the location and boundaries of individual parcels of land subdivided into lots, with streets, alleys, easements, etc., Usually drawn to a scale. Black's Law Dictionary, 5th Edition.
PLAT BOOK: One in a set of books in the public records in which maps, plats, and copies of surveys are recorded.
POLICE POWER: The inherent authority of a government to impose restrictions upon private property or private rights for the sake of public welfare, order, and security.
POLICY: (See "Owner's Policy", "Mortgagee Policy", and "Loan Policy.")
POWER OF ATTORNEY: A legal instrument authorizing one to act as another's agent or attorney.
PRECEDENT: A previously decided case that can serve as authority to help decide a present controversy.
PRELIM: See "Preliminary Report".
PRELIMINARY CERTIFICATE: (See "Binder.")
PRELIMINARY REPORT: A written report issued by a title company prior to issuing title insurance, showing the matters discovered in their title search which would appear as exceptions in a title policy if the policy were issued as of the date of the report.
PREMIUM: (1) The amount payable for an insurance policy. (2) A sum of money or bonus paid in addition to the regular price.
PREPAYMENT CLAUSE: A provision in a loan agreement permitting the debtor, for consideration, to pay part or all of the balance of the debt before its due date, thus saving interest.
PREPAYMENT PENALTY: Charge imposed by a lender on a borrower who wants to pay all or part of the loan balance before its due date.
PRESCRIPTION: In the broad sense of modern times, the gaining of some right or interest in real estate through long and continuous adverse use, usually for a period prescribed by statute, such as the acquisition of an easement by the unlicensed and adverse use of a path, roadway, or utility lines across another property.
PRESCRIPTIVE EASEMENT: A right to use another's property which is not inconsistent with the owner's rights and which is acquired by a use, open and notorious, adverse and continuous for the statutory period (e.g. Twenty years). To a certain extent, it resembles title by adverse possession but differs to the extent that the adverse user acquires only an easement and not title. To create an easement by "prescription," the use must have been open, continuous, exclusive, and under claim of right for statutory period. (See, also "Adverse Possession.") Black's Law Dictionary, 5th Edition.
PRESUMPTION: That which may be assumed without proof.
PRETERMIT: To omit; to pass by. For example, a child who is not mentioned in his parent's will is referred to as a pretermitted heir.
PRIMA FACIE: Assumed correct until overcome by further proof.
PRIMARY RETENTION or PRIMARY LIABILITY: These terms refer to a level of reinsurance liability. It is the amount of liability retained by the ceding company for which it has the sole liability in the event of a loss. When reinsurance is involved, fees paid under a title policy obligation to defend are not deducted from the primary retention; that is, primary retention includes these fees. If the primary is, for instance, $5,000,000, then the total liability for the retention includes defense costs as well as damages up to that amount. When reinsurance is obtained by a ceding company, the primary retention will vary depending upon the size of the company. Unless restricted, the primary retention is usually set at $5,000,000, and any remaining amounts above the primary retention that the ceder wants to take become secondary reinsurance or are placed on another level, such as tertiary.
PRINCIPAL: (1) A sum of money owed as debt upon which interest is payable. (2) A person who empowers another to act as his representative or agent. (3) The person having prime responsibility for an obligation as distinguished from one who acts as a surety or endorser.
PRIORITY: The relative superiority of competing liens or encumbrances.
PROBATE: A legal procedure in which the validity and probity of a document, such as a will, is proven.
PROMISSORY NOTE: A written promise to pay or repay a specified sum of money at a stated time, or on demand, to a named person. In addition to the payment of principal, a promissory note usually provides for the payment of interest.
PROPERTY: (1) Something tangible or intangible capable of being owned and controlled. (2) Lands or chattels in which a person owns some right, title or interest to the exclusion of all others.
PUBLIC DOMAIN: Land of which title still vests in the United States of America.
PUBLIC RECORDS: The transcriptions in a recorder's office of instruments which have been recorded, including the indexes pertaining to them.
PURCHASE MONEY MORTGAGE: A mortgage given by a purchaser to a seller on the subject property to secure payment of all or a part of the purchase price.
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Security Title Company of Montana
600 South 19th Avenue
Bozeman, MT 59718
QUASI: To some degree, almost, partially, somewhat. Also resembling but not quite being the thing in question.
QUIET ENJOYMENT: (1) One of the common law warranties. (2) Assurance that one's title, possession, or use of real estate will not be disturbed or disrupted by a legitimate cause or adverse right.
QUIET TITLE SUIT: A lawsuit brought by an owner of real estate for the purpose of canceling, wiping out, and putting a quietus upon supposedly immaterial, inconsequential, and unenforceable claims and interests which cloud his title.
QUIETUS: Final disposition, settlement or elimination of a claim or debt.
QUIT CLAIM DEED: A deed which does not imply that the grantor holds title, but which surrenders and gives to the grantee any possible interest or rights which the grantor may have in the property.
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Security Title Company of Montana
600 South 19th Avenue
Bozeman, MT 59718
RANGE: As used in descriptions, a column of townships running parallel with a principal meridian.
RATE: This term, when used in the title industry, usually refers to the rate for title insurance. In this sense it means the cost per dollar unit of title insurance. For example, the rate for ten thousand dollar title insurance policy is (so many) dollars.
RATE SCHEDULE: The respective costs of dollar units of title insurance listed on an ascending scale.
REAL ESTATE: Land, including all inherent natural attributes and any man-made improvements of a permanent nature placed thereon.
REALTOR: A copyrighted trade name which can be legally used only by those persons belonging to the national association of real estate boards.
REALTY: Another name for real estate.
RECORD TITLE: The aspects of a title which appear in the public records as distinguished from unrecorded title aspects and interests.
RECORDING: The act of a recorder receiving and transcribing in a book or on a film of the public records, instruments affecting the title to real estate.
RECORDS: (See "Public Records.")
REDEMPTION: A buyback or the ability to buy back. (See "Equity of Redemption.")
REFORMATION ACTION: Court action to correct a mistake in a deed or other document.
REINSTATEMENT: Cure of a default by a borrower and restoration of the loan to current status through payment of past-due amounts.
REINSURANCE: Insurance insuring an insurer. When an insurance company has issued a policy and does not want to be fully exposed to loss for the full amount of the policy, the company may purchase reinsurance from another insurance company to insure the first company against a part or all of the loss which the first company may have to pay under its policy.
REINSURER: An insurance company that agrees to sell insurance to a ceder and thereby assumes a portion of the ceder's liability in the event a loss occurs. (See Ceder.)
RELEASE: (1) To relieve from debt or security or abandon a right, such as the release of a mortgage lien from a part or all of the land mortgaged. (2) The instrument affecting a release.
RELEASE OF DOWER: (1) The deed or other instrument by which a wife releases her inchoate dower rights in land. (2) The act of releasing dower.
RELEASE OF LIEN: (1) The instrument by which a lien is released from the real estate which it encumbers. (2) The act of releasing a lien.
REMAINDER: An estate or interest in land which comes into being upon the termination of an existing estate or interest. When a grantor conveys a life estate to "a" with remainder to "b," it means that "a" has a part of the absolute title and "b" has the remainder. Also, that "a" will own the property during his natural life, but at his death, instead of the property going to "a's" heirs or devisees, it goes to "b."
REMAINDERMAN: The person who owns an estate in remainder.
REMISE: To discharge or release.
RENT: The consideration paid for the use of property.
RESCISSION: (1) Court action brought to cancel or annul the effect of executing a contract or other document. (2) The act of canceling or annulling the effect of a document.
RESERVATION: A right or interest retained by a grantor in conveying property.
RESIDUARY CLAUSE: The "catch all" or omnibus clause of a will directing distribution of any property not specifically bequeathed or devised.
RESIDUE: That part of a decedent's estate remaining after payment of debts and taxes and distribution of specific bequests and devises.
RESTRICTIONS: Often called restrictive covenants. Provisions in a deed or other instrument whereby an owner of land prohibits or restricts certain use, occupation, and improvement of the land.
RESTRICTIVE COVENANTS: (See "Restrictions.")
REVERSION: (1) The return of an estate or interest to a grantor or lessor after the grant or lease has expired. (2) The interest retained by a fee simple owner of real estate after granting a terminable estate or interest in such property to another. For example, when a fee simple owner gives a lease to a tenant, the interest which the owner has left is known as the reversion. (3) A provision accompanying restrictive covenants in a deed, which provision stipulates that in the event the restrictions are violated, title to the property shall revert to the grantor.
REVERTER CLAUSE: (See "Reversion" (3).)
RIDER: Addition, amendment or endorsement to a document, e.g., An insurance contract.
RIGHT: A power, privilege, prerogative, estate, or interest incident to real estate.
RIGHT OF WAY: (1) The right to pass over property owned by another, usually based upon an easement. (2) A path or thoroughfare over which passage is made. (3) A strip of land over which facilities such as highways, railroads, or power lines are built.
RIPARIAN OWNER: One who owns the upland bordering on a stream or other body of water.
RIPARIAN RIGHTS: The many rights of a person in, to and over the banks, bed, shallows, shore and water of a stream or body of water upon which his land borders.
RISK: Exposure to loss. A title insurance company assumes the risk incident to a possible title loss when it insures the owner of the title.
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Security Title Company of Montana
600 South 19th Avenue
Bozeman, MT 59718
SALE AGREEMENT: A contract entered into between a buyer and seller, setting forth the terms, provisions, and conditions of a sale of real estate.
SALE AND LEASEBACK: A situation in which the grantor in a deed to a parcel of property sells it and retains possession by simultaneously leasing it from the grantee.
SALES CONTRACT: (See "Sale Agreement.")
SATISFACTION: (1) The payment of a debt or fulfillment of an obligation. (2) An instrument executed by the holder of a lien, debt or obligation which acknowledges payment or fulfillment. For example, a satisfaction of a mortgage sometimes is referred to as a satisfaction piece.
SEAL: Impression on a document that lends authenticity to its execution, such as affixing the corporate seal to a document executed by a corporation.
SEARCH: In title industry parlance, a careful exploration for and perusal of the public records in an effort to find all recorded instruments relating to a particular chain of title.
SECOND MORTGAGE: A mortgage ranking in priority immediately below a first mortgage. (See "Junior Mortgage.")
SECONDARY RETENTION: When reinsurance is obtained by the ceding company from a reinsurer, the reinsurer's liability is secondary to the primary liability of the ceding company. This is termed secondary retention. The primary retention must first be expended before the second company pays. All companies that sell reinsurance on the secondary level are joined together and share losses on a pro-rata basis based on their amount of reinsurance in relation to the total amount of reinsurance purchased. If four companies agree to be secondary reinsurers, and each has $5,000,000, then each would have liability for 25 percent of any loss that exceeds the primary, up to the full amount agreed upon. (See Primary Retention or Primary Liability.)
SECTION: Measure of land; one of the divisions employed in a government survey. It measures one mile on each side and contains 640 acres of land (if regular in shape.)
SECURITY: Assurance against the default or non-payment of a debt or obligation which makes the enforcement of a promise or an obligation more certain than the personal commitment of the debtor or obligator. Usually the pledge of property.
SEISIN: (Also spelled "Seizin") An old English term meaning legal possession or the right to legal possession of real estate under a freehold title.
SERVIENT ESTATE: Incident to an easement, the property upon or across which an easement exists. (See "Dominant Estate.")
SERVITUDE: A right or interest in a piece of real estate, which right or interest serves or benefits another unrelated property. For example, an easement across one piece of property serves another piece of property is said to constitute a servitude regarding the property upon which it is located.
SET ASIDE: To declare invalid or void; to annul. For example, a court may set aside an erroneous judgment or decree.
SETBACK LINE: (See "Building Line.")
SETTLEMENT: Act or process of adjusting or determining; an adjusting; an adjustment between persons concerning their dealings or difficulties; an agreement by which parties having disputed matters between them reach or ascertain what is coming from one to the other; arrangement of difficulties; composure of doubts or differences; determination by agreement; and liquidation. Sowers v. Robertson, 144 kan. 173, 58 p.2d 1105, 1107. Payment or satisfaction. Ledbetter v. Hall, 191 ark. 791, 87 s.W.2d 996, 999. Black's Law Dictionary, 5th Edition. (See "Closing.")
SKY LEASE: A lease of air space above a piece of land. The ownership of land extends down to the center of the earth and up to the sky. Space above the land can, therefore, be leased or sold. Cantilever or bridge type buildings which do not depend on the lessor's land for support may be built in such air space.
SLANDER OF TITLE: False, unjustified statements regarding another person's title to property.
SPECIAL ASSESSMENT: (See "Improvement Liens.")
SPECIAL WARRANTY DEED: A deed which warrants the title only with respect to acts of the grantor and the interests of anyone claiming by, through, or under him.
SPECIFIC PERFORMANCE: A lawsuit in which the court compels one of the parties to perform or carry out the provisions of a contract into which he has entered.
SPECULATIVE BUILDER: One who constructs buildings for sale without having firm purchase commitments. Speculative building is quite common in residential housing developments and in condominiums.
SQUATTER: One who settles upon unoccupied land without legal claim or authority. (See "Adverse Possession.")
STARE DECISIS: The legal doctrine that past decisions of the courts stand as precedents for future decisions.
STARTER: A copy of a prior policy or report issued by a title insurer which describes the title to land upon which a new search is to be made. In some states, this is called a base, back title letter or back title certificate.
STATUTE OF FRAUDS: A state law that requires that certain contracts, such as a contract for the sale of land, must be in writing to be enforceable.
STATUTE OF LIMITATIONS: A statute setting a time limit on the enforcement of right or on the collection of a debt in certain cases.
SUBDIVISION: An area of land laid out and divided into lots, blocks and building sites, and in which public facilities are laid out, such as streets, alleys, parks, and easements for public utilities.
SUBJACENT: A term applied to land or property lying contiguous to, but at a lower level than, another piece of property.
SUBLET: To rent property which one holds by lease, to another.
SUBORDINATION: Giving a lien or interest an inferior status. For example, an existing mortgage may be subordinated to the lien of a new construction loan mortgage in which case the construction loan mortgage becomes the lien with priority.
SUBROGATION: The legal doctrine under which the law substitutes one creditor or claimant for another. When a title insurance company pays a claim under a title insurance policy, it is entitled to step into the shoes of the insured with respect to any rights the insured may have against parties who warranted the title to him.
SUBSTITUTION RATE: A special rate available in some areas for title insurance policies covering substitution loans.
SUIT: Usually meaning a lawsuit.
SUMMONS: A court process that directs a defendant to make an appearance in an action filed against him.
SURETY: (1) A person who agrees to be responsible for a debt or obligation of another. (2) The pledge or agreement by which one undertakes responsibility for the debt or obligation of another.
SURVEY: (1) To determine the location, boundaries, area, or the elevations of land and structures upon the earth's surface by means of courses in relation to the north star, and the measuring of angles and distances by using the techniques of geometry and trigonometry. (2) The map or plat drawn by a surveyor which represents the property surveyed and shows the results of a survey.
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Security Title Company of Montana
600 South 19th Avenue
Bozeman, MT 59718
MARKET VALUE: An average between the highest price which a buyer, willing but not compelled to buy, would pay and the lowest price a seller, willing, but not compelled to sell, would accept.
MARKETABLE TITLE: A title which is free from encumbrances and any reasonable doubt as to its validity, and such as a reasonably intelligent person, who is well informed as to facts and their legal bearings, and ready and willing to perform his contract, would be willing to accept in exercise of ordinary business prudence. Sinclair v. Weber, 204 Md. 324, 104 a.2d 561, 565.
MARSHALING: Arranging, ranking, or disposing in order; particularly, in the case of a group or series of conflicting claims or interests, arranging them in such an order of sequence, or so directing the manner of their satisfaction, as shall secure justice to all persons concerned and the largest possible measure of satisfaction to each. Equitable doctrine of "marshaling" rests upon principle that creditor having two funds to satisfy his debt may not, by his application of them to his demand, defeat another creditor, who may resort to only one of the funds. Columbia Bank for Cooperatives v. Lee, C.A.N.C., 368 f2d 934, 939.
MEANDER: To follow a winding course.
MECHANIC'S LIEN: A lien on real estate, created by operation of law, which secures the payment of debts due to persons who perform labor or services or furnish materials incident to the construction of buildings and improvements on the real estate.
MEETING OF MINDS: The state that exists when all parties to a contract agree to the exact terms thereof.
MERGER OF TITLE: Absorption of one estate into another, a uniting of different interests in a parcel of property into one ownership.
MERIDIANS: Imaginary north-south lines that intersect base lines to form a starting point for measurement of land.
METES AND BOUNDS: A land description in which boundaries are described by courses, directions, distances, and monuments.
MONUMENT: Object or mark used by a surveyor to fix or to establish boundaries or land location.
MORTGAGE: (From the latin terms "mors" or "mort" meaning death or dead.) A temporary and conditional pledge of property to a creditor as security for the payment of a debt which may be satisfied or canceled by payment.
MORTGAGE BOOK: A book in the public records in which mortgages are recorded.
MORTGAGEE: The holder of a mortgage. The party to whom a mortgage is made.
MORTGAGEE POLICY: (Sometimes called a mortgage policy.) A policy of title insurance insuring the holder of a mortgage against loss occasioned by the impairment or invalidity of the lien of the mortgage or because of defects in, superior liens upon, or unmarketability of the title.
MORTGAGOR: A person who mortgages property. A person who executes a mortgage.
MULTIPLE LISTING: The pooling, in a central bureau, of listings of properties for sale, which listings are held individually by members of a group of real estate brokers, with the agreement that any member of the group may sell the properties and in case of a sale, the commission will be divided among the broker making the sale, the broker who filed the listing, and the bureau.
MUNIMENT OF TITLE: (1) Documentary evidence of title. The instruments of writing and written evidences which the owner of lands, possessions, or inheritances has, by which he is enabled to defend the title of his estate. (2) The records of title transactions in the chain of title of a person purporting to create the interest in land claimed by such person and upon which he relies as a basis for the marketability of his title commencing with the root of title and including all subsequent transactions. Black's Law Dictionary, 5th Edition.
Security Title Company of Montana
600 South 19th Avenue
Bozeman, MT 59718
NEGLIGENCE: The omission or neglect of reasonable precaution, care or action.
NEGOTIABLE: Capable of being legally transferred by endorsement from one person to another, such endorsement carrying with it, without written provisions, implications of certain contractual obligations.
NEGOTIABLE INSTRUMENT: Instrument, e.g., a promissory note or check meeting certain legal requirements, that allows it to circulate freely in commerce.
NET LISTING: The listing, with a broker, of real estate for sale for a specified price, net to the seller, exclusive of commission and closing costs.
NOMINEE: Party designated to act in place of the original buyer in a real estate transaction. Does not act on own behalf, but as trustee for real party.
NON-INTERCOURSE ACTS: The refusal of one state or nation to have commercial dealing with another. Similar to an embargo. Generally relates to Indians and dealings with Indians.
NOTARIZE: To prove execution of a document by means of a notary public's certificate of acknowledgment.
NOTARY PUBLIC: A person authorized by law to take acknowledgments and to administer oaths.
NOTE: An instrument containing an express and absolute promise of signer (i.e. maker) to pay to a specified person or order, or bearer, a definite sum of money at a specified time. Two party instrument made by the maker and payable to payee which is negotiable if signed by the maker and contains an unconditional promise to pay sum certain in money, on demand or at a definite time, to order or bearer. U.C.C. Sec. 3-104(1). A note not meeting these requirements may be assignable but not negotiable. Black's Law Dictionary, 5th Edition. (See "Promissory Note.")
NUISANCE: Anything that is offensive and works an injury or harm to a person or property. May be either a public nuisance (offends the general public) or a private nuisance (offends one property owner.)
NUNC PRO TUNC: "Now for then" a tardy act made retroactive to take effect as of the time it should have been done.
Security Title Company of Montana
600 South 19th Avenue
Bozeman, MT 59718
OBLIGATION: That which a person is bound by a promise, contract or by law to do.
OFFICIAL RECORD BOOK: One of a set of books in the public records in which is recorded all papers filed for record. Such books supplant deed books and mortgage books.
OPEN-END MORTGAGE: A mortgage (or deed of trust) that, in addition to the original obligation, secures additional advances made by the lender after the date of execution of the mortgage. Additional advances may be either optional or obligatory. (See, also "Future Advance Clause.")
OPINION: In the title industry referred to as title opinion. The conclusion and judgment of a skilled person as to the status of a title, based upon a title examination.
OPTION: A right, given for consideration, to purchase or lease a parcel of property within a specified time and on specified terms.
ORDER CONFIRMING SALE: A court order confirming sale of estate property.
ORDINANCE: A legislative enactment by a city or county.
OVERRIDING ROYALTY: An interest in oil and gas to be produced that a lessee may retain when executing an assignment of an oil and gas lease.
OWNER'S POLICY: A policy of title insurance usually insuring an owner of real estate against loss occasioned by defects in, liens against, or unmarketability of the owner's title.
Security Title Company of Montana
600 South 19th Avenue
Bozeman, MT 59718
PARCEL: Any area of land contained within a single description.
PAROL: Orally, by word of mouth. For example, if a landowner gives another verbal permission to gather firewood from his land, or permission to hunt game thereon, that verbal permission would be called a parol license. Also, a witness who testifies by word of mouth in court is said to give parol testimony as contrasted to written evidence which may be introduced in the case, such as original deeds, wills, correspondence, or other documents.
PAROL GIFT: A gift made orally, by word of mouth as contrasted to one made in writing.
PARTITION: In the title industry, a lawsuit between joint owners of real estate in which the court either divides the property between them or orders the property sold and divides the proceeds between them.
PARTNERSHIP: A voluntary association of two or more persons to carry on as co-owners of a business for profit. May be either a general partnership or a limited partnership.
PARTY WALL: A wall built along the boundary line of adjoining properties and shared by the respective property owners or tenants.
PATENT: 1) (noun) A conveyance, by the federal government, of title to a portion of the public land. (2) (adjective) Apparent, obvious, open to view. (See, also "Latent.")
PERCENTAGE LEASE: A lease of property in which the rental is based upon the volume of sales made by the lessee on the leased property.
PERIMETER: (1) The boundary lines enclosing a tract of land. (2) The length of the boundary lines enclosing a tract of land.
PERPETUITY: The taking of property out of the channel of commerce by limiting its capacity to be sold for a period of time longer than that of a life in being plus 21 years and a period of gestation. It is the condition of an estate limited so that it will not take effect or vest within a period fixed by law. Also called the "Rule Against Remoteness of Vesting."
PERSONAL PROPERTY: Temporary or movable property as distinguished from real estate.
PERSONALTY: Personal property.
PLAINTIFF: The party initiating an action.
PLANNED UNIT DEVELOPMENT: A planned unit development ("PUD") is a project in which, typically, the buildings are built in styles that are sometimes referred to as "cluster housing." PUD is a concept according to which housing, typically a group of townhomes, patiohouses, or row-houses, is built with minimal ground space or yards surrounding each dwelling. The ground which would normally constitute the yard for each dwelling is consolidated into a larger recreational or greenbelt area. This area usually also includes all walks, drives, and parking areas. The individual dwellings and, possibly, a small patio, flower bed, or similar minimal ancillary personal use site, which may be owned with the residence, are individually owned. All of the ancillary land, such as recreation areas, greenbelts, walkways and others ("common area") are owned as an undivided interest, usually indirectly, with others. Because of the typical land ownership divisions, the unit owners are granted easements appurtenant (running with the land) foringress, egress, parking, and recreational use over the common area; otherwise the units would be landlocked.
PLAT: A map of a town, section, or subdivision showing the location and boundaries of individual parcels of land subdivided into lots, with streets, alleys, easements, etc., Usually drawn to a scale. Black's Law Dictionary, 5th Edition.
PLAT BOOK: One in a set of books in the public records in which maps, plats, and copies of surveys are recorded.
POLICE POWER: The inherent authority of a government to impose restrictions upon private property or private rights for the sake of public welfare, order, and security.
POLICY: (See "Owner's Policy", "Mortgagee Policy", and "Loan Policy.")
POWER OF ATTORNEY: A legal instrument authorizing one to act as another's agent or attorney.
PRECEDENT: A previously decided case that can serve as authority to help decide a present controversy.
PRELIM: See "Preliminary Report".
PRELIMINARY CERTIFICATE: (See "Binder.")
PRELIMINARY REPORT: A written report issued by a title company prior to issuing title insurance, showing the matters discovered in their title search which would appear as exceptions in a title policy if the policy were issued as of the date of the report.
PREMIUM: (1) The amount payable for an insurance policy. (2) A sum of money or bonus paid in addition to the regular price.
PREPAYMENT CLAUSE: A provision in a loan agreement permitting the debtor, for consideration, to pay part or all of the balance of the debt before its due date, thus saving interest.
PREPAYMENT PENALTY: Charge imposed by a lender on a borrower who wants to pay all or part of the loan balance before its due date.
PRESCRIPTION: In the broad sense of modern times, the gaining of some right or interest in real estate through long and continuous adverse use, usually for a period prescribed by statute, such as the acquisition of an easement by the unlicensed and adverse use of a path, roadway, or utility lines across another property.
PRESCRIPTIVE EASEMENT: A right to use another's property which is not inconsistent with the owner's rights and which is acquired by a use, open and notorious, adverse and continuous for the statutory period (e.g. Twenty years). To a certain extent, it resembles title by adverse possession but differs to the extent that the adverse user acquires only an easement and not title. To create an easement by "prescription," the use must have been open, continuous, exclusive, and under claim of right for statutory period. (See, also "Adverse Possession.") Black's Law Dictionary, 5th Edition.
PRESUMPTION: That which may be assumed without proof.
PRETERMIT: To omit; to pass by. For example, a child who is not mentioned in his parent's will is referred to as a pretermitted heir.
PRIMA FACIE: Assumed correct until overcome by further proof.
PRIMARY RETENTION or PRIMARY LIABILITY: These terms refer to a level of reinsurance liability. It is the amount of liability retained by the ceding company for which it has the sole liability in the event of a loss. When reinsurance is involved, fees paid under a title policy obligation to defend are not deducted from the primary retention; that is, primary retention includes these fees. If the primary is, for instance, $5,000,000, then the total liability for the retention includes defense costs as well as damages up to that amount. When reinsurance is obtained by a ceding company, the primary retention will vary depending upon the size of the company. Unless restricted, the primary retention is usually set at $5,000,000, and any remaining amounts above the primary retention that the ceder wants to take become secondary reinsurance or are placed on another level, such as tertiary.
PRINCIPAL: (1) A sum of money owed as debt upon which interest is payable. (2) A person who empowers another to act as his representative or agent. (3) The person having prime responsibility for an obligation as distinguished from one who acts as a surety or endorser.
PRIORITY: The relative superiority of competing liens or encumbrances.
PROBATE: A legal procedure in which the validity and probity of a document, such as a will, is proven.
PROMISSORY NOTE: A written promise to pay or repay a specified sum of money at a stated time, or on demand, to a named person. In addition to the payment of principal, a promissory note usually provides for the payment of interest.
PROPERTY: (1) Something tangible or intangible capable of being owned and controlled. (2) Lands or chattels in which a person owns some right, title or interest to the exclusion of all others.
PUBLIC DOMAIN: Land of which title still vests in the United States of America.
PUBLIC RECORDS: The transcriptions in a recorder's office of instruments which have been recorded, including the indexes pertaining to them.
PURCHASE MONEY MORTGAGE: A mortgage given by a purchaser to a seller on the subject property to secure payment of all or a part of the purchase price.
Security Title Company of Montana
600 South 19th Avenue
Bozeman, MT 59718
QUASI: To some degree, almost, partially, somewhat. Also resembling but not quite being the thing in question.
QUIET ENJOYMENT: (1) One of the common law warranties. (2) Assurance that one's title, possession, or use of real estate will not be disturbed or disrupted by a legitimate cause or adverse right.
QUIET TITLE SUIT: A lawsuit brought by an owner of real estate for the purpose of canceling, wiping out, and putting a quietus upon supposedly immaterial, inconsequential, and unenforceable claims and interests which cloud his title.
QUIETUS: Final disposition, settlement or elimination of a claim or debt.
QUIT CLAIM DEED: A deed which does not imply that the grantor holds title, but which surrenders and gives to the grantee any possible interest or rights which the grantor may have in the property.
Security Title Company of Montana
600 South 19th Avenue
Bozeman, MT 59718
RANGE: As used in descriptions, a column of townships running parallel with a principal meridian.
RATE: This term, when used in the title industry, usually refers to the rate for title insurance. In this sense it means the cost per dollar unit of title insurance. For example, the rate for ten thousand dollar title insurance policy is (so many) dollars.
RATE SCHEDULE: The respective costs of dollar units of title insurance listed on an ascending scale.
REAL ESTATE: Land, including all inherent natural attributes and any man-made improvements of a permanent nature placed thereon.
REALTOR: A copyrighted trade name which can be legally used only by those persons belonging to the national association of real estate boards.
REALTY: Another name for real estate.
RECORD TITLE: The aspects of a title which appear in the public records as distinguished from unrecorded title aspects and interests.
RECORDING: The act of a recorder receiving and transcribing in a book or on a film of the public records, instruments affecting the title to real estate.
RECORDS: (See "Public Records.")
REDEMPTION: A buyback or the ability to buy back. (See "Equity of Redemption.")
REFORMATION ACTION: Court action to correct a mistake in a deed or other document.
REINSTATEMENT: Cure of a default by a borrower and restoration of the loan to current status through payment of past-due amounts.
REINSURANCE: Insurance insuring an insurer. When an insurance company has issued a policy and does not want to be fully exposed to loss for the full amount of the policy, the company may purchase reinsurance from another insurance company to insure the first company against a part or all of the loss which the first company may have to pay under its policy.
REINSURER: An insurance company that agrees to sell insurance to a ceder and thereby assumes a portion of the ceder's liability in the event a loss occurs. (See Ceder.)
RELEASE: (1) To relieve from debt or security or abandon a right, such as the release of a mortgage lien from a part or all of the land mortgaged. (2) The instrument affecting a release.
RELEASE OF DOWER: (1) The deed or other instrument by which a wife releases her inchoate dower rights in land. (2) The act of releasing dower.
RELEASE OF LIEN: (1) The instrument by which a lien is released from the real estate which it encumbers. (2) The act of releasing a lien.
REMAINDER: An estate or interest in land which comes into being upon the termination of an existing estate or interest. When a grantor conveys a life estate to "a" with remainder to "b," it means that "a" has a part of the absolute title and "b" has the remainder. Also, that "a" will own the property during his natural life, but at his death, instead of the property going to "a's" heirs or devisees, it goes to "b."
REMAINDERMAN: The person who owns an estate in remainder.
REMISE: To discharge or release.
RENT: The consideration paid for the use of property.
RESCISSION: (1) Court action brought to cancel or annul the effect of executing a contract or other document. (2) The act of canceling or annulling the effect of a document.
RESERVATION: A right or interest retained by a grantor in conveying property.
RESIDUARY CLAUSE: The "catch all" or omnibus clause of a will directing distribution of any property not specifically bequeathed or devised.
RESIDUE: That part of a decedent's estate remaining after payment of debts and taxes and distribution of specific bequests and devises.
RESTRICTIONS: Often called restrictive covenants. Provisions in a deed or other instrument whereby an owner of land prohibits or restricts certain use, occupation, and improvement of the land.
RESTRICTIVE COVENANTS: (See "Restrictions.")
REVERSION: (1) The return of an estate or interest to a grantor or lessor after the grant or lease has expired. (2) The interest retained by a fee simple owner of real estate after granting a terminable estate or interest in such property to another. For example, when a fee simple owner gives a lease to a tenant, the interest which the owner has left is known as the reversion. (3) A provision accompanying restrictive covenants in a deed, which provision stipulates that in the event the restrictions are violated, title to the property shall revert to the grantor.
REVERTER CLAUSE: (See "Reversion" (3).)
RIDER: Addition, amendment or endorsement to a document, e.g., An insurance contract.
RIGHT: A power, privilege, prerogative, estate, or interest incident to real estate.
RIGHT OF WAY: (1) The right to pass over property owned by another, usually based upon an easement. (2) A path or thoroughfare over which passage is made. (3) A strip of land over which facilities such as highways, railroads, or power lines are built.
RIPARIAN OWNER: One who owns the upland bordering on a stream or other body of water.
RIPARIAN RIGHTS: The many rights of a person in, to and over the banks, bed, shallows, shore and water of a stream or body of water upon which his land borders.
RISK: Exposure to loss. A title insurance company assumes the risk incident to a possible title loss when it insures the owner of the title.
Security Title Company of Montana
600 South 19th Avenue
Bozeman, MT 59718
SALE AGREEMENT: A contract entered into between a buyer and seller, setting forth the terms, provisions, and conditions of a sale of real estate.
SALE AND LEASEBACK: A situation in which the grantor in a deed to a parcel of property sells it and retains possession by simultaneously leasing it from the grantee.
SALES CONTRACT: (See "Sale Agreement.")
SATISFACTION: (1) The payment of a debt or fulfillment of an obligation. (2) An instrument executed by the holder of a lien, debt or obligation which acknowledges payment or fulfillment. For example, a satisfaction of a mortgage sometimes is referred to as a satisfaction piece.
SEAL: Impression on a document that lends authenticity to its execution, such as affixing the corporate seal to a document executed by a corporation.
SEARCH: In title industry parlance, a careful exploration for and perusal of the public records in an effort to find all recorded instruments relating to a particular chain of title.
SECOND MORTGAGE: A mortgage ranking in priority immediately below a first mortgage. (See "Junior Mortgage.")
SECONDARY RETENTION: When reinsurance is obtained by the ceding company from a reinsurer, the reinsurer's liability is secondary to the primary liability of the ceding company. This is termed secondary retention. The primary retention must first be expended before the second company pays. All companies that sell reinsurance on the secondary level are joined together and share losses on a pro-rata basis based on their amount of reinsurance in relation to the total amount of reinsurance purchased. If four companies agree to be secondary reinsurers, and each has $5,000,000, then each would have liability for 25 percent of any loss that exceeds the primary, up to the full amount agreed upon. (See Primary Retention or Primary Liability.)
SECTION: Measure of land; one of the divisions employed in a government survey. It measures one mile on each side and contains 640 acres of land (if regular in shape.)
SECURITY: Assurance against the default or non-payment of a debt or obligation which makes the enforcement of a promise or an obligation more certain than the personal commitment of the debtor or obligator. Usually the pledge of property.
SEISIN: (Also spelled "Seizin") An old English term meaning legal possession or the right to legal possession of real estate under a freehold title.
SERVIENT ESTATE: Incident to an easement, the property upon or across which an easement exists. (See "Dominant Estate.")
SERVITUDE: A right or interest in a piece of real estate, which right or interest serves or benefits another unrelated property. For example, an easement across one piece of property serves another piece of property is said to constitute a servitude regarding the property upon which it is located.
SET ASIDE: To declare invalid or void; to annul. For example, a court may set aside an erroneous judgment or decree.
SETBACK LINE: (See "Building Line.")
SETTLEMENT: Act or process of adjusting or determining; an adjusting; an adjustment between persons concerning their dealings or difficulties; an agreement by which parties having disputed matters between them reach or ascertain what is coming from one to the other; arrangement of difficulties; composure of doubts or differences; determination by agreement; and liquidation. Sowers v. Robertson, 144 kan. 173, 58 p.2d 1105, 1107. Payment or satisfaction. Ledbetter v. Hall, 191 ark. 791, 87 s.W.2d 996, 999. Black's Law Dictionary, 5th Edition. (See "Closing.")
SKY LEASE: A lease of air space above a piece of land. The ownership of land extends down to the center of the earth and up to the sky. Space above the land can, therefore, be leased or sold. Cantilever or bridge type buildings which do not depend on the lessor's land for support may be built in such air space.
SLANDER OF TITLE: False, unjustified statements regarding another person's title to property.
SPECIAL ASSESSMENT: (See "Improvement Liens.")
SPECIAL WARRANTY DEED: A deed which warrants the title only with respect to acts of the grantor and the interests of anyone claiming by, through, or under him.
SPECIFIC PERFORMANCE: A lawsuit in which the court compels one of the parties to perform or carry out the provisions of a contract into which he has entered.
SPECULATIVE BUILDER: One who constructs buildings for sale without having firm purchase commitments. Speculative building is quite common in residential housing developments and in condominiums.
SQUATTER: One who settles upon unoccupied land without legal claim or authority. (See "Adverse Possession.")
STARE DECISIS: The legal doctrine that past decisions of the courts stand as precedents for future decisions.
STARTER: A copy of a prior policy or report issued by a title insurer which describes the title to land upon which a new search is to be made. In some states, this is called a base, back title letter or back title certificate.
STATUTE OF FRAUDS: A state law that requires that certain contracts, such as a contract for the sale of land, must be in writing to be enforceable.
STATUTE OF LIMITATIONS: A statute setting a time limit on the enforcement of right or on the collection of a debt in certain cases.
SUBDIVISION: An area of land laid out and divided into lots, blocks and building sites, and in which public facilities are laid out, such as streets, alleys, parks, and easements for public utilities.
SUBJACENT: A term applied to land or property lying contiguous to, but at a lower level than, another piece of property.
SUBLET: To rent property which one holds by lease, to another.
SUBORDINATION: Giving a lien or interest an inferior status. For example, an existing mortgage may be subordinated to the lien of a new construction loan mortgage in which case the construction loan mortgage becomes the lien with priority.
SUBROGATION: The legal doctrine under which the law substitutes one creditor or claimant for another. When a title insurance company pays a claim under a title insurance policy, it is entitled to step into the shoes of the insured with respect to any rights the insured may have against parties who warranted the title to him.
SUBSTITUTION RATE: A special rate available in some areas for title insurance policies covering substitution loans.
SUIT: Usually meaning a lawsuit.
SUMMONS: A court process that directs a defendant to make an appearance in an action filed against him.
SURETY: (1) A person who agrees to be responsible for a debt or obligation of another. (2) The pledge or agreement by which one undertakes responsibility for the debt or obligation of another.
SURVEY: (1) To determine the location, boundaries, area, or the elevations of land and structures upon the earth's surface by means of courses in relation to the north star, and the measuring of angles and distances by using the techniques of geometry and trigonometry. (2) The map or plat drawn by a surveyor which represents the property surveyed and shows the results of a survey.
Security Title Company of Montana
600 South 19th Avenue
Bozeman, MT 59718