In the United States, there are two basic category-types of “property title systems.” These are known, respectively, as “land recording” and “land registration” systems, and are established at the state level. While both categories are relatively common in the industrialized world, at present there are more states in America using the land recording system than the land registration system. And this is the case in Arizona.
There are reasons for this. The land registration system establishes a centralized depository of land evidence records for a given municipality or county, or whatever sort of jurisdiction applies. Where this system holds, a governmental body actively determines ownership of title and encumbrances to a given parcel of land—and, generally speaking, the decision of such a governmental body will be considered final. Perhaps just as definitively, in this sort of system the infrastructure for title determination is paid for by levying taxes—placing fiscal responsibility for judgments and processing onto the shoulders of the public at large rather than just those party to real property exchange.
There was a time, during the first couple of decades of the 20th Century, when this style of land registration enjoyed wide currency in the United States. But a single judgment on a case in California caused it to fall out of favor across the country, once officials everywhere watched the state’s entire indemnification fund go bankrupt.
That said, there are still pockets of the country that use this system, though in a generally limited fashion. As mentioned above, Arizona is not among them.
The land recording system is far less centralized in format than land registration. No governmental body or official hands down a final decision regarding the ownership of title. The government’s role—most often at the county level—is instead to merely record transfer instruments. These records are made open to the public. In this system—again, the system used in Arizona—only the parties interested in a sale of a property are responsible for any errors in the recording or judgments against them, with title insurance coming into play as a means to keep the risk to any one party from getting too high and stifling the market. This system also adds the benefit of creating redundancy in the records. If a fire breaks out at the building that holds the records, for example, then there are other means by which the proof of title may be gleaned.
If you’re looking to buy a home in Mesa or anywhere else in the state of Arizona, you’ll need an experienced attorney with strong scruples to help you gainclear title and help mitigate risks. AtProvidentLaw, our real estate attorneys represent parties on either side of real estate and financing transactions, including buyers, sellers, landlords, tenants, lenders, borrowers, trustees, guarantors, shareholders, partners, and others. We structure, negotiate and document a variety of real estate and financing transactions, such as leases, purchase and sale agreements, loans and development agreements for a variety of commercial and residential projects. Contact us for more details.
Christopher J. Charles is the founder and Managing Partner of Provident Law ®. He is a State Bar Certified Real Estate Specialist and a former “Broker Hotline Attorney” for the Arizona Association of REALTORS ® (the “AAR”). Mr. Charles holds the AV ® Preeminent Rating by the Martindale-Hubbell Peer Review Ratings system which connotes the highest possible rating in both legal ability and ethical standards. He serves as an Arbitrator and Mediator for the AAR regarding real estate disputes; and he served on the State Bar of Arizona’s Civil Jury Instructions Committee where he helped draft the Agency Instructions and the Residential Landlord/Tenant Eviction Jury Instructions.
Christopher is a licensed Real Estate Instructor and he teaches continuing education classes at the Arizona School of Real Estate and Business. He can be reached at Chris@ProvidentLawyers.com or at 480-388-3343.