In order to truly understand the benefits and limitations of title insurance we’re breaking it down for you. This article is the first part of a four-part series. We will cover the following topics with you over the next four weeks:
- Part 1: What is title?
- Part 2: What is the “public records doctrine” and why does it matter?
- Part 3: What is a “title examination” and why is it important?
- Part 4: Title insurance basics
Part 1: What is “title”?
The types of real rights, that is, interests in immovable property, that Louisiana law recognizes are ownership, personal servitudes, predial servitudes and such other real rights as permitted by law.
Ownership is the real right that purchasers of residential real estate are most concerned about, and thus, this part will be dedicated to that land interest. So, two questions that need addressing:
- How is ownership defined in Louisiana?
- Ownership is defined by the Louisiana Civil Code as the right that confers upon a person direct, immediate and exclusive authority over a thing. The owner may use, enjoy, and dispose of property within the limits and under the conditions established by law. The right to use property and the right to dispose of property are separate and distinct attributes of ownership.
- What is immovable property?
- Louisiana law defines immovables as tracts of land with their component parts. It further defines what a component part of a tract of land is. Buildings, other constructions permanently attached to the ground, standing timber, and unharvested crops or ungathered fruits of trees are component parts of a tract of land when they belong to the owner of the ground.
- Thus, ownership of a tract of land includes ownership of its component parts. Whether or not a thing is considered a component part of a tract of land is not always clear, and the topic deserves its own discussion. Suffice it to say that if the buildings, other constructions, permanently attached to the ground and standing timber are owned by the owner of the ground, then they are considered component parts, and ownership of the tract of land includes ownership of those things. Thus, the sale or other conveyance of the tract of land also includes the component parts.
- In the absence of a recorded instrument showing otherwise, third parties are entitled to assume that buildings or improvements and component parts of the land belong to the owner of the ground. A purchaser of real estate acquires title to all buildings and improvements unless a third person has recorded an instrument evidencing title to the improvements in the conveyance records. Additionally, ownership of a tract of land carries with it the ownership of everything that is above or under it, inclusive of air space and the underlying soil.
- “Title,” may be described as the evidence of ownership (or other real right) in a particular person or entity to a particular piece of immovable as shown by the public records. Under the Louisiana public records doctrine, all written instruments affecting real estate must be recorded in the appropriate public records in order to affect third persons. In simple terms, all sales, contracts, judgments and other instruments in writing affecting immovable property which are not recorded are utterly null and void except between the parties to those instruments. The recording may be made at any time, but it only affects third persons from the time of the recording.
Andrew Mendheim, the author of this article, has borrowed extensively from the scholarly writing of Mr. Peter S. Title, Louisiana Real Estate Transactions, which has proven to be an invaluable resource for the Louisiana real estate practitioner, and also from First American Title Insurance Company’s web resources.