I spoke to a lawyer yesterday regarding a refinancing of our home, and asked why there was a charge of a couple of thousand to research the title. He said it was standard practice, and I asked why it was necessary when all registered land carries a guarantee according to the statutes.
Registering land is done by decree, and once the court issues it:
“§ 43-12. Effect of decree; approval of judge.
Every decree rendered as hereinbefore provided shall bind the land and bar all persons and corporations claiming title thereto or interest therein; quiet the title thereto, and shall be forever binding and conclusive upon and against all persons and corporations, whether mentioned by name in the order of publication, or included under the general description, “to whom it may concern”; and every such decree so rendered, or a duly certified copy thereof, as also the certificate of title issued thereon to the person or corporation therein named as owner, or to any subsequent transferee or purchaser, shall be conclusive evidence that such person or corporation is the owner of the land therein described, and no other evidence shall be required in any court of this State of his, her, or its right or title thereto. It shall not be an exception to such conclusiveness that a person is a minor, is incompetent, or is under any disability, but such person may have recourse upon the indemnity fund hereinafter provided for, for any loss the person may suffer by reason of being so concluded. Notwithstanding the provisions of G.S. 43-10, such decrees shall not be binding on and include the State of North Carolina or any of its agencies unless the State of North Carolina is made a party to the proceeding and notice of said proceeding and copy of petition, etc., are served upon the State of North Carolina as provided in this Chapter. Such decrees shall, in addition to being signed by the clerk of the court, be approved by the judge of the superior court, who shall review the whole proceeding and have power to require any reformation of the process, pleading, decrees or entries. (1913, c. 90, s. 9; 1919, c. 82, s. 3; C.S., s. 2388; 1925, c. 263; 1979, c. 73, s. 2; 2011-29, s. 4.)”
What about later purchasers?
“§ 43-17.5. Issuance of new certificate validated.
Whenever heretofore any registered certificate of title has been surrendered by the heirs or devisees of any deceased registered owner of any registered title and the registered certificate of title of such deceased owner has been surrendered and canceled and a new certificate of title issued to a purchaser or to such heirs or devisees, the same is hereby validated and confirmed and made effectual to the same extent as though such new certificate had been issued in compliance with the provisions of this Chapter. (1943, c. 466, s. 1.)“
This quality of assurance contained in the certificate issued from the original decree carries through undiluted, to every subsequent holder of a certificate of title.
So why do we need title insurance?
“§ 43-18. Registered owner’s estate free from adverse claims; exceptions.
Every registered owner of any estate or interest in land brought under this Chapter shall, except in cases of fraud to which he is a party or in which he is a privy, without valuable consideration paid in good faith, and except when any registration has been procured through forgery, hold the land free from any and all adverse claims, rights or encumbrances not noted on the certificate of title, except
(1) Liens, claims or rights arising or existing under the laws or Constitution of the United States which the statutes of this State cannot require to appear of record under registry laws;
(2) Taxes and assessments thereon due the State or any county, city or town therein, but not delinquent;