What is an "Abstract" and what is "Torrens" Property?
The United States has two systems for determining real estate title. The most common and oldest is the abstract system. The abstract is an assembly of summaries of all deeds, liens, judgments, interests and other instruments relating to a parcel of real estate. When a parcel of property is conveyed, or mortgaged an attorney or title insurance firm reviews the abstract, traces the history of grantors and grantees related to the parcel over the years, matches mortgages with satisfactions of mortgages; essentially connecting the transactions to arrive at the present date and the present owner, and what liens or encumbrances are still valid.
In Minnesota, as well as Massachusetts, Illinois and Hawaii, the abstract system is being gradually replaced by a system of registered land titles. Land is initially registered through a court proceeding. An examiner of titles or similar government official will examine the abstract of title, and draw a conclusion as to ownership. A court action is then commenced to obtain a decree of registration confirming that ownership, with notice being given to anyone in the chain of title who might have grounds to object.
At the end of the process, the owner obtains a certificate of
title to the property. The certificate is conclusive evidence as to the ownership of the property for most purposes, and any liens or encumbrances must be recorded (or memorialized) on the certificate to be valid (literally "on the actual certificate"). When ownership of the property changes, the old certificate of title will be canceled and a new certificate issued in the name
of the new owner. The registration process greatly simplifies the task of examining and determining title.
This system (Certificate of Title) is also referred to as the Torrens System, after its developer Sir Robert Torrens, an Irish national, instrumental in organizing the conveyance of land in Australia during the mid 1800's. The system was embraced by the Crown and employed in much of the British Commonwealth.
Today, as mentioned earlier, Minnesota is one of the very few states leading the implementation of the Torrens system in the U.S.A.