ULC

Marketable Title Act, Model Summary

The Uniform Simplification of Land Transactions Act was promulgated by the Uniform Law Commissioners in 1976. It contains several chapters or articles relating to various real property law topics. Among them is Article 3, which includes marketable title provisions. Such legislation has a history going back to the work of Simes and Taylor at the University of Michigan. In 1990, the Uniform Law Commissioners have taken marketable title provisions from Article 3 of the Uniform Simplification of Land Transactions Act and have created from them a free-standing act that may be enacted by itself. It is the Uniform Marketable Title Act (UMTA).

  

The UMTA attacks the curse of the hidden ancient interests in land. In American property law, interests in land can be diverse and multiple. Some interests appear on the land records. Others don't. As time passes, the opportunity for multiple interests of various kinds to arise with respect to any piece of identified geography increases. When any piece of geography currently passes, the question always arises, how far back should the title search go to identify any possible interests that may exist in the land. The problem is not current interests. Those are detectable and usually apparent. The problem is ancient interests that nobody has asserted for a very long time and so go unnoticed. The prospect of ancient interests is a current cloud on title, an expense to those engaged in current transactions, and a drag on marketability of any real estate.

Is there a way to take care of this problem, expeditiously and efficiently? The answer is the UMTA. Its objective is to extinguish ancient interests that nobody asserts and limit the need to search title back to the earliest roots to assure title. Every piece of real estate currently held has root of title that extends back no more than 30 years. Whatever the records show to be the unbroken chain of title to a maximum of 30 years back—that is all that the current holder of the real estate or anybody who contemplates a transfer of real estate from the current holder has to worry about. Any interests that are not on the record as of that date 30 years back are automatically extinguished, with some limited exceptions. The hidden ancient interest is no more.

What are the exceptions? Occupation is the principal exception. Anybody who occupies premises apparent by reasonable inspection or inquiry, has whatever rights that occupancy provides, even though there is nothing on the record within the last 30 years. Any clearly observable restriction remains, notwithstanding the record for the past 30 years. The rights of any person represented on the publicly accessible tax rolls within three years of the time marketability is to be determined, is preserved. Claims of the federal government cannot be extinguished. There is optional language that allows mineral interests to be preserved, depending upon the policy determination to be made in each enacting state.

In addition, anybody who claims an interest can preserve it by recording it within the 30-year period that constitutes any marketable record title. It is preserved, effectively, for 30 years after the date of recording. Further recordation would preserve it for the succeeding 30 years, and so on. UMTA offers those with legitimate interests the opportunity to take affirmative action to maintain them.

Further, a person who has an interest that may go back earlier than the 30-year period for root of title on any piece of real estate, has two years after the adoption of this Act to record and make that interest good. Interests are not automatically extinguished when UMTA takes effect, and people have time to protect their ancient interests that are real interests.

The effect of UMTA is to clear title for all real estate and to improve marketability, hence the title of the Act. Real interests are preserved. Only ancient interests that nobody will assert are extinguished. There can only be beneficial result from the adoption of the UMTA.