THE OKLAHOMA BAR JOURNAL 38 | JUNE 2024 Any title requirements reflected in an Attorney’s Title Opinion or Title Insurance Commitment, [must be] based on the Standards of marketable title set out in the Title Examination Standards of the Oklahoma Bar Association. It is certainly beneficial to the public to have uniform procedures to confirm that identified parties have solid reliable chains of title (instead of each title examiner taking a separate arbitrary approach); such certainty, in turn, supports the ability of owners to be comfortable in using their land (surface and minerals) and for lenders to advance funds on it for mortgages. For this system to flow smoothly, one needs to know who holds title to the land and, therefore, has the right to use, mortgage and sell it. The procedure for examining title to a parcel of land and determining whether it is encumbered with liens or easements or other limitations begins with the compilation of copies (paper or digital) of the deeds, decrees/judgments, liens and encumbrances comprising the chronological “chain of title” from the county land records (commonly referred to as an abstract of title). Often, when examining title to severed minerals, a direct review of the county land indexes and instruments is undertaken by a landman to compile a set of notes or a collection of copies of the relevant instruments that form the chain of title. Such informal compilation or notes are usually accompanied by a copy of the relevant indexes maintained by the county clerk. Second, an examination of such abstract, copied instruments or notes is usually conducted by a licensed attorney (or, depending on the circumstances, by a paralegal or landman) reviewing such abstract, instruments or notes and then expressing an opinion as to who is the current owner of marketable record title and listing any recorded liens and encumbrances. The examiner would also identify any defects in the ownership “chain of title,” such as a missing probate or defective deed, along with a requirement for the necessary curative action, usually by an instrument (e.g., a quit claim deed) or a court proceeding (e.g., a probate). The use of title insurance to insure the title of buyers and the valid lien position of lenders (for surface or fee simple titles but not severed minerals) is a widespread practice in the real estate industry. Notably, the Oklahoma Statutes provide: No policy of title insurance shall be issued in the State of Oklahoma except: 1) After examination by an attorney licensed to practice in this state of a duly certified abstract extension or supplemental abstract prepared by an abstractor licensed in the county where the property is located, from a certified abstract plant in the county where the property is located.4 Additionally, the Oklahoma attorney general has held: Your second question raises the issue of whether the title examination for purposes of issuing a title policy must be done by a licensed attorney. A previous opinion of the Attorney General held: “All such examinations of abstract ... shall be conducted by a licensed attorney prior to issuance of the policy of title insurance.” A.G. Opin. No. 78-151 (June 6, 1978). This opinion was based on the assertion that a title insurance policy “expresses an opinion as to the marketability of title.” A.G. Opin. 78-151, supra. In reality, title insurance simply insures the policyholder against defects in the title. It does not express an opinion that the title is marketable. Land Title Company of Alabama v. State ex rel. Porter, 299 So. 289, 295 (Ala. 1974). While the rationale of the previous opinion is incorrect, we adhere to the conclusion expressed in that opinion that the examination of the abstract pursuant to 36 O.S. 5001(C) (1981) must be done by a licensed attorney. We reach this conclusion because the examination required by statute would only be useful if the examiner expressed an opinion on the marketability of the title. This constitutes the practice of law by the examiner. Land Title Company of Alabama v. State ex rel. Porter, supra at 295; Kentucky State Bar Association v. First Federal Savings & Loan, 342 S.W.2d 397 (Ky.App. 1961). The theory that the corporation is actually examining the title for itself through an agent or employee and thus not engaged in the practice of law is invalid since laypersons or nonprofessionals cannot perform legal services for Statements or opinions expressed in the Oklahoma Bar Journal are those of the authors and do not necessarily reflect those of the Oklahoma Bar Association, its officers, Board of Governors, Board of Editors or staff.
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