Statute of Frauds

• State laws govern the rights that homeowners have when purchasing property after obtaining a property abstract that does not reflect any clouds on title or encumbrances. Property laws in most states require owners to transfer land pursuant to written instruments or legal deeds, according to the common law statute of frauds doctrine. According to the statute of frauds, oral land transfers are invalid, and contracts for the transfer of real property are void unless memorialized in writing.
  
  

Compiling Information From Property Abstracts

• Title examiners or property abstractors use recorded property abstracts to provide title insurance companies with chronological information pertaining to a specific property or piece of raw land. Companies that issue title insurance to lenders and home buyers use property abstracts to prepare their title insurance binders. Typically, state laws require that licensed attorneys provide opinions on the chain of title using all the information provided by property abstractors. Chain of title opinions provided by non-attorneys using property abstracts are generally considered the unauthorized practice of law by most states.
  
  

Uniform Marketable Title Act

• Since property abstract evaluations are subject to state laws, and state laws vary as to the superiority of ownership claims under a properly recorded chain of title compared to improperly recorded interests or unrecorded interests, states have tried to unify their recording systems. In 1990, the National Conference of Commissioners on Uniform State Laws amended its Uniform Simplification of Land Transfers Act of 1977 with its official Uniform Marketable Title Act.
  
  Although the Uniform Marketable Title Act is not a federal law, most states have adopted the entire act or incorporated it piecemeal. According to the Uniform Marketable Title Act, all land that is properly recorded pursuant to state law creates a valid ownership claim. As such, all owners who record their land transfers and property interests have superior claims to ownership over purported owners of unrecorded land interests and conveyances.