The Marketable Record Title Act Made Easy
Until passage of the Marketable Record Title Act (MRTA) in 1963,l an examination of title involved a review of all documents relating to the property recorded in the county in which the property in question was located from the earliest public records to the present. That lengthy process usually involved the purchase of an abstract of title from a reliable source and a review and analysis of every document and title transaction shown in the abstract. Fortunately, that process has generally been replaced by a “short-cut” method of title examination. The rules of the short-cut are set forth in F.S. Ch. 712. The method of an MRTA examination is not clear from a reading of that statute. The purpose of this article is to reveal the MRTA examination method in a clear and concise manner and to explain the basic effect of the law.
The substance of MRTA is stated in F.S. §712.04 which states in part: “Subject to matters stated in s. 712.03, such marketable record title shall be free and clear of all estates, interests, claims, or charges whatsoever, the existence of which depends upon any act, title transaction, event or omission that occurred prior to the effective date of the root of title.” This statement describes the effect of MRTA and introduces two new title concepts: 1) marketable record title, and 2) root of title. F.S. §712.02 states in part:
Any person having the legal capacity to own land in this state, who, alone or together with his predecessors in title, has been vested with any estate in land of record for 30 years or more, shall have a marketable record title to such estate in said land, which shall be free and clear of all claims except matters set forth as exceptions to marketability in s. 712.03.
MRTA creates a new statutory concept of title: marketable record title. Most old title considerations arising prior to the root of title can be ignored because their effect on title has been eliminated by the legislature’s enactment of MRTA. In effect, MRTA works as the ultimate statute of limitations. When other such statutes do not cure a particular title defect, MRTA ultimately will, unless the matter is an exception to the curing effect of MRTA. The statute eliminates ancient defects or stale claims to real property and limits the labor involved in a traditional title examination. The statute modifies the concept of marketable title by confirming marketability based on a marketable record period and a consideration of some exceptions stated in the statute, rather than a perfect record from the earliest public records to the present.
F.S. §712.03 states exceptions to MRTA and is, therefore, a limiting factor in the elimination of these older title defects or considerations. However, MRTA does effectively eliminate all defects or title considerations not covered in F.S. §712.03. The effect on anyone examining title is to relieve him or her from considering any title matters occurring before the root of title unless the matter is listed in F.S. §712.03 as an exception to the curative effect of MRTA.
The other term of art used in MRTA is the concept of “root of title.” F.S. §712.01(2) defines this concept as “any title transaction purporting to create or transfer the estate claimed by any person and which is the last title transaction to have been recorded at least for 30 years prior to time when the marketability is being determined.” For our purposes, this definition is lacking in detail and direction. In order to find a root of title in an abstract, an elemental definition is necessary. A title transaction to be used as a root of title must contain four elements:
1) A recorded instrument or court proceeding which affects title to an estate or interest in land; and
2) which describes the land sufficiently, and
3) creates or transfers the claimed estate; and
4) has been of record for at least 30 years.
A root of title can be a recorded instrument or a court proceeding. A title transaction is evidenced by either a document of conveyance (for example, a warranty deed) or some litigation which transfers title. A title transaction through litigation, such as probate, foreclosure, or a quiet title suit can qualify as a root of title. The document one looks for to evidence a root of title transaction in a litigation context is a final judgment.
However, it is not simply the final judgment that the examiner must review. Title is subject to defects and other matters “inherent” in the root of title.2 This is a timing concept. It has to do with the cut-off point for matters cured by MRTA. It means that any matter associated with the transaction that is considered to be the root of title is not one of the defects or matters cured by MRTA. For example, defects on the face of a deed evidencing a root of title, and matters associated with that title transaction are not cured by MRTA.
When one relies on litigation as a root of title, defects inherent in the root are defects in the litigation process. These defects may be substantive or procedural errors. For example, if one were to rely on a probate title transaction as a root of title, and during the probate litigation an heir was not discovered, was intentionally omitted, or was not given proper notice of the probate proceedings, title would still be subject to the claims of the heir. For these purposes the effective date of a root of title is the date on which it was recorded.3
Element 2 means the root of title must have a good legal description. The root of title must describe real property. A written legal description may not be necessary if it is clear what property is referred to in the root of title transaction. For example, review of a probate court file may not disclose a written legal description of any property although it is clear, from a review of the whole title, that the deceased did own real property and that his or her devisees have succeeded to his or her interest through the probate process.
Element 3 defines the root of title as a transaction. A root of title is a transaction, not a document. The document “used” as the root of title is a time marker which documents when the transaction occurred. Some transactions are “creations” of title where none existed before, or creation of an estate in one who did not have that interest before. In a foreclosure transaction, a fee simple estate is usually created for a lienholder. The use of the word “create” in the definition of root of title in F.S. §712.01(2) is simply an acknowledgment that a root of title need not be a traditionally recognized transfer or conveyance to qualify as a root of title transaction.
A caveat is in order regarding reliance on documents of conveyance to mark a root of title transaction. Before you rely on a document of conveyance as a root of title, make sure that it is a document that transfers title. Specifically, a quit claim deed can be a document that conveys title, or it can be used for other purposes. The public records are replete with quit claim deeds that are used as a means to clear title defects, satisfy mortgages, and other purposes which are not title transactions. Before relying on any document like a quit claim deed, make sure that the grantor had title to convey and that the document represents a title transfer.
Element 4 is a clear statement although it is often misunderstood. It does not mean that you only have to search for the last 30 years! It means that you follow a process to find a root of title which is “at least” 30 years old. In any particular title, your root of title will most likely be more than 30 years old.
It is a good idea to contact your title insurance underwriter to discuss what can be relied upon as a root of title when you intend to insure title and to eliminate known defects created prior to a questionable root of title.
How to Examine
The method of an MRTA title examination is not clear from a reading of the statute. The following is a “how to” explanation of an MRTA examination.
Understand that the examination covers the period of time from the earliest public records to the present. The “short-cut” is the abridged examination of matters prior to the root of title. For purposes of discussion, reference is made to an abstract examination although any reliable title information which covers that period of time can be used.
First, locate a document in your abstract (or other title information) which is to be your root of title. In order to do this, review your abstract to find the latest document which is at least 30 years old. Consider that document to be the 30 years “milestone.” From that milestone, review your abstract going backward in time until you locate the document to evidence the root of title transaction. Compare what you have chosen to the elemental definition of a root of title.
Once you have located the root of title, divide your abstract into two parts: 1) the “preroot” part, and 2) the part including the root and all documents filed since the root until the present (the “postroot” part). An MRTA examination involves examining the two parts of the divided whole earliest public records abstract (preroot part and the postroot part) in two different ways. The postroot part of the abstract is examined in detail and every document and transaction analyzed thoroughly. The preroot part is examined in an abridged manner in order to discover exceptions to MRTA.
Depending on the nature of your abstract, this short-cut method will likely save you most of the time involved with a thorough understanding of the preroot title, because you do not have to thoroughly analyze or understand the preroot chain of title. You only have to examine the preroot chain to locate the exceptions to MRTA.
How do you “examine for exceptions” to MRTA? The exceptions are described in F.S. §712.03 which has seven subparts describing seven “rights” that are not affected or extinguished by MRTA. However, only four of the seven exceptions would be apparent from an abstract examination. The exceptions are as follows:
1. Rights of parties in possession of the land.4 2. Rights of persons in whose names the land is assessed on the county tax roles for three years after assessment.5 3. Rights arising subsequent to the root of title.6 4. Rights reserved to the U.S. Government or state government.7 5. Old claims to rights in property preserved by filing a Notice under MRTA.8 6. Easements actually in use.9 7. Rights disclosed on the face of documents recorded from the root to the present, even if they are preroot matters, provided specific reference is made to the preroot right.10
Items 1 and 2 above will not appear in the abstract and require an investigation or inquiry into matters outside of record title. Though abstracts generally contain tax information, it is limited to the’current taxes and delinquent taxes. Item 3 is ruled out by definition because postroot rights are always considered relevant title matters. Items 4-7 require explanation.
Regarding item 4, the state cannot divest the federal government of rights or title by passing a state law and the statute does not intend to do so;11 therefore, federal government interests are not affected by MRTA. As a result, the preroot examination requires review of the deed or other document (generally a certificate of patent) in which the federal government parted with title to determine whether the U.S. Government retained any interest in land. If they did, the title is still subject to rights described in the document.
Likewise, interest retained by the State of Florida,12 and “state sovereignty lands”13 are not subject to extinguishment by MRTA. This necessitates examining for retained interests in the original or first conveyance from the State of Florida, and also examining any “Murphy Deeds” if the state regained title under the Murphy Act (usually canal rights, mineral rights or road right-of-way reservations are retained by the state). Lands under navigable waters (i.e., state sovereignty lands) are not affected by MRTA.14
Regarding item 5, MRTA has a provision allowing persons having old property rights (which were to be extinguished by the enactment of MRTA) to preserve those rights by recording a statutorily prescribed notice.15 In a rare case, a statutory MRTA notice is found in an abstract, and does preserve old interests which would have been extinguished by MRTA if the notice had not been filed.
Regarding item 6, easements established prior to the root of title, if presently being used, are not eliminated by MRTA. Many of the easements currently being used are evidenced by documents recorded prior to the root of title. Even though the easement is old, and the easement document is located in the preroot part of the abstract, it cannot be ignored if the easement is still in use. If the easement is preroot and not currently in use, it is extinguished by MRTA. This causes the easement question to be twofold. First, does the easement exist? And second, is the easement in use? If the old easement does exist of record, further inquiry is required in order to deter mine whether the easement is currently in use. If it is currently in use, the old easement interest is preserved by virtue of being an exception to the effect of MRTA. If further inquiry shows the old easement has been abandoned, it is extinguished by MRTA.
Remember that use of any part of an easement preserves the whole easement. Because an easement can arise by a grant of easement document or by a reservation of easement in a muniment of title ( i.e., deeds), an examination of the preroot title involves looking for documents creating easements (grants) and looking at deeds or other muniments in the chain of title for reserved easements. Therefore, an MRTA examination of title also involves review of all deeds or other muniments in the chain of title from the earliest public records to the present for the presence of retained easements.
In addition to an examination of these muniments for reserved easement interests, a complete MRTA examination involves review of them for reservations of mineral rights.16 It is a review of the face of muniments which makes up the chain of title for reserved interests and a search of the preroot documents for grants of easements and grants of mineral rights.
Item 7 is the most difficult to explain and to understand. During your post- root examination of muniments of title, you may find a reference to property rights which exist due to documents of title which are actually recorded prior to the root of title. A specific reference to a preroot property right in a muniment of title in the postroot part of the abstract will reimpose the preroot matter. Covenants or restrictions, for example, are reimposed by specific reference to the preroot document creating them, when such reference is made in a deed in the postroot chain of title, even though these same restrictions would be extinguished by MRTA if they were not specifically referred to in the postroot muniment.
It is most important to understand the statutory necessity of “specific reference.” This means the official records book and page or plat book and page where the reimposed preroot matter is recorded must be stated accurately in the postroot document in order to reimpose the preroot matter.17 A general reference such as “subject to restrictions of record” will not reimpose anything. It is interesting to note that the nature of legal descriptions used in a document of conveyance, such as “according to the plat thereof recorded in Plat Book 1, page 2” will reimpose title matters shown on the plat because of the specific reference to the plat.
Consequently, title matters shown on the face of plats are seldom eliminated by MRTA because they are continuously reimposed by specific reference to the plat in each subsequent deed or conveyance. References characterized by the words “subject to” with a citation to the book and page of the document creating the rights will reimpose those rights on the land. One result of this exception is to allow reimposition of matters for one lot in a subdivision when those restrictions have generally expired for most all of the lots in the neighborhood due to a reference made in the postroot chain of title for that lot.
As a result of this potential for reimposition of old property rights, when you are examining the postroot part of the abstract of title, you may be directed to documents in the preroot part of the abstract showing property rights created by a preroot document and thus reimposed on title.
An MRTA examination seeks to find the following: 1) Interest of the U.S. Government, 2) interest of the State of Florida, 3) easements (in use preroot and postroot type), 4) mineral rights (both reserved and granted), and 5) postroot matters (including reimposed and noticed preroot matters). Remember that the title information used in an MRTA search must cover the period of time from the earliest public records to the present!
How is an MRTA examination done? First, locate a root of title transaction. Next, divide your title information to a preroot part and a postroot part. In the preroot part of the title, search for conveyances from the United States or Florida, easements, and mineral rights.
Remember that searching for easements and mineral rights means examining all muniments in the preroot chain of title for reserved interests and searching for documents which grant easement or mineral interests. Remember also, that the State of Florida may have reacquired title after 1937 due to the Murphy Act, so there may be two conveyances from the state.
Look for interest retained by the U.S. or state government on the face of their conveyance document. If you locate an easement, assume it is still in use unless you investigate and find it is not. During the postroot examination, look for specific references to preroot documents, and for statutory MRTA notices which preserve preroot rights. Then locate the document specifically referred to in the postroot muniment or MRTA notice, and consider its effect on title. following this method, you will have discovered all matters which currently affect the title under examination and omitted consideration of matters cured by MRTA.
1 Session Law Ch. 63-133.
2 Fla. Stat. §712.03(1).
3 Fla. Stat. §712.01(2).
4 Fla. Stat. §712.03(3).
5 Fla. Stat. §712.03(6).
6 Fla. Stat. §712.03(4).
7 Fla. Stat. §712.03(7).
8 Fla. Stat. §712.03(2).
9 Fla. Stat. §712.03(5).
10 Fla. Stat. §712.03(1).
11 Fla. Stat. §712.04.
12 Fla. Stat. §712.04.
13 Fla. Stat. §712.03(7). Coastal Petroleum v. American Cyanamid, 492 So. 2d 339
14 See generally Fund Title Notes, TN 32.01.02.
15 Fla. Stat. §712.05.
16 Mineral interests escape the effect of MRTA because they are a separate estate and have a separate chain of title. Therefore, both reservations of mineral rights retained in deeds, etc., and granted mineral rights should be discovered. Mineral rights are not affected by MRTA and are part of any title regardless of the passage of time. See Fund Title Notes, TN 27.01.01.
17 Fla. Stat. §712.03(1).
Gregory Cook is Broward County underwriting counsel for Attorneys’ Title Insurance Fund. In addition to offering services for real estate attorneys on behalf of the Fund, he lectures statewide on issues of title examination and insurance and real estate law. This article is an adaptation of a segment of his published text Introduction to Real Estate Title Examination and Insurance, 2d Ed., 1991.
This article is submitted on behalf of the Real Property, Probate and Trust Law Section, Louie Adcock, Jr., chair, and James P. McDonald and Phyllis Ann Hood, editors.