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In general, a “title” is the evidence of one’s ownership of land, the extent of his interest, and the means whereby the owner is enabled to assert or maintain his rights and possession.  In order to prove title, it became necessary for owners of real property to preserve each instrument affecting his real property.  In many cases, these instruments were destroyed by fire, flood, etc.  Consequently, a great need arose for a system to prevent loss by reason of natural disasters, misplaced documents, etc.  Further, an innocent purchaser not knowing the true owner, might be led to purchase real estate from parties not owning it.  This problem was solved by the adoption of the recording system for real estate titles.[1]  Unlike personal property for which a certificate of title is issued (i.e., a motor vehicle), title to real property in Oklahoma is evidenced by a compilation of documents filed of record, including deeds, mortgages and easements.  This compilation is known as an “abstract of title.”

Under the recording system, a real estate transaction is not binding upon one who has no actual knowledge of the transaction, unless the instrument in writing, in consummation of such transaction, in legal form, executed and acknowledged in compliance with the laws of the State in which the real estate is located, is made a matter of public record, as provided by law.  The purpose of the recording system is (i) to preserve a record of the instruments of title and the evidence of their voluntary execution, and (ii) to give the public notice of the change of ownership of property or the existence of liens thereon.

InOklahoma, documents affecting real property are recorded at the Office of theCountyClerkin the county where the real property is located.  From the moment an instrument entitled to record is filed with theCountyClerk, the public has knowledge of the transaction therein mentioned.  TheCountyClerkis charged with the care and custody of all books, records, maps, papers, plats, etc. affecting the title to real property.  TheCountyClerkalso keeps a record of all platted additions and subdivisions.  Any instrument, if properly acknowledged, and otherwise conforming to the law, shall be recorded by theCountyClerkupon payment of the recording fee, which is set by law.  Currently, the recording fee inOklahomais $13.00 for the first page of a document and $2.00 for each additional page within the same document.

Oklahomauses a tract index system, which is a form of recording documents that preserves the history of title through identification of transactions with the particular tract.  Accordingly, those seeking to research land records inOklahomamust search by legal description, rather than by name of the property owner.

a.      The Real Estate Contract

In regards to a residential sale, the Oklahoma Real Estate Contract Form Committee of the Oklahoma Real Estate Commission (“OREC”) publishes numerous forms that can be utilized by the public, including a “Contract of Sale of Real Estate.”  This contract form is utilized by the offeror (“Purchaser”).  The offeree (“Seller”) can either accept the contract by executing it or can counteroffer by using the “Seller’s Counteroffer to Sale of Real Estate Contract” form. [2]    In regards to a commercial real estate sale, a contract is typically drafted by an attorney representing the proposed buyer, but a form contract is available on OREC’s website.

b.     The Abstract of Title and Attorney’s Title Opinion

Once a title company receives a contract executed by both parties, the abstract of title must be located and brought to date by a licensed and bonded abstractor.  An abstract of title is a compilation in orderly arrangement of the materials and facts of record, in the office of the county clerk and court clerk, affecting the title to a specific tract of land issued pursuant to a certificate certifying to the matters therein contained.[3]  Among the types of documents included in an abstract of title are the following:

–          All instruments that have been recorded in the Office of the County Clerk which legally impart constructive notice of matters affecting title to the subject property, any interest therein, or encumbrances thereon (e.g., deeds, mortgages, etc.);

–          Records of the District Court Clerk and the County Clerk that disclose executions, court proceedings, pending suits, and liens of any kind affecting the title to said real estate;

–          Judgments or transcripts of judgments against any of the parties appearing within the chain of title of the abstract, either indexed and docketed prior to October 1, 1978 on the judgment docket of the District Court Clerk or filed for record or recorded on or after October 1, 1978 in the office of the County Clerk of said county; and

–          All ad valorem tax liens due and unpaid against said real estate, tax sales thereof unredeemed, tax deeds, unpaid special assessments certified to the Office of the County Treasurer, due and unpaid, tax sales thereof unredeemed, and tax deeds given thereon and unpaid personal taxes which are a lien on said real estate.

While all states require some form of title search or abstracting to issue title insurance, only Oklahomaand Iowastill require an abstract of title to be prepared by a bonded and licensed abstractor.  The Oklahoma State Legislature adopted the Oklahoma Abstractor’s Law (Title 1) on January 1, 2008, which directs the Oklahoma Abstractor’s Board (OAB) to regulate Oklahoma’s abstract industry.  The OAB issues Certificates of Authority, individual abstractor licenses as well as Permits to Develop Abstract Plants.  In addition, the OAB offers bi-monthly testing to individuals seeking their abstractor’s license.  The OAB also investigates consumer and industry complaints concerning abstracting issues and attempts to resolve them by using informal resolution methods.   More information about the Oklahoma Abstractor’s Board can be found at http://www.ok.gov/abstractor.

Once the abstract has been brought to date by a licensed and bonded abstractor, an attorney must examine the title by reviewing all documents contained in the abstract of title and prepare an attorney’s title opinion.  Oklahoma law provides that no insurer shall issue, permit or cause to be issued, either directly or by an agent, a binder, commitment or policy of title insurance until either the title insurance company or its authorized agent shall have obtained an opinion of title by an attorney licensed to practice law in the State of Oklahoma based upon an examination of a duly certified abstract of title prepared by a bonded and licensed abstractor.[4]

The purpose of an attorney’s title opinion is to determine whether title to the subject property is marketable.  “A marketable title is one free from apparent defects, grave doubts and litigious uncertainty, and consists of both legal and equitable title fairly deducible of record.”[5]  The attorney’s title opinion is a title report that will generally address the following:  the legal description of the property, the identity of the owner, the restrictions, liens and other encumbrances which affect the title, and the requirements which must be met in order to make the title insurable.  The opinion must be signed by the attorney and state his Oklahoma Bar Association number.

When an attorney prepares a title opinion, they are guided by a set of standards known as the Title Examination Standards of the Real Property Section of the Oklahoma Bar Association.  The Title Examination Standards are reviewed and developed throughout the year by the Title Examination Standards Committee, a group of real property attorneys who meet on the third Saturday of the month, January through September.  The Title Examination Standards Committee meetings are open to all attorneys who wish to attend a meeting.[6]  The new and revised standards developed throughout the year are presented at the annual meeting of the Oklahoma Bar Association in November to the House of Delegates and are then voted upon.   If approved, the new and/or revised standards become effective January 1 of the following year.

[1] Land Title Course: A Treatise on Land Titles, Revision of 1971, by General Counsel of American First Title & Trust Company (1971).

[3] 1 O.S. § 21(1)

[4] 36 O.S. § 5001(C)(1)

[5] Oklahoma Title Examination Standards, as adopted by the House of Delegates of the Oklahoma Bar Association on November 21, 2008, Real Property Law Section of the Oklahoma Bar Association (2008).

[6] Go to http://www.okbar.org/members/sections/real-property/tes.htm for more information about the Title Examination Standards Committee and meeting dates and locations.