What is the purpose of establishing a chain of title?

The purpose of establishing a chain of title primarily involves creating a comprehensive history of past ownership of a property. A chain of title is a record of all the parties who have had ownership interest in a piece of real estate. This history is essential in real estate transactions as it provides proof of ownership and helps identify any potential claims or liens on the property that could affect a new buyer’s ability to take full ownership.

By having a well-documented chain of title, it becomes easier to ensure that the seller has the legal right to transfer the property to the buyer. This record of ownership helps prevent disputes about who rightfully owns the property and ensures that any heirs or creditors have been accounted for. It also plays a significant role in title insurance, as insurers use this information to assess risk and provide coverage.