American Land Title Association (ALTA) Practice Exam 2025 - Free ALTA Practice Questions and Study Guide

A "chain of title" refers to a chronological sequence of ownership of a property. It is a legal concept that outlines the history of the ownership of a specific parcel of land, from the original owner to the current owner. Each transfer of ownership, whether through sale, inheritance, or other means, is documented and linked in this chain. This continuity is crucial for establishing clear title and ensuring that the property can be legally sold without disputes over its ownership.

Understanding the chain of title is essential for title insurance companies and property buyers because it helps reveal any potential issues, such as claims, liens, or disputes, that could affect the owner's legal rights to the property. By reviewing the chain, one can confirm the legitimacy of the current ownership and uncover any defects that may need to be addressed.

The other options represent different concepts related to property but do not accurately describe the "chain of title." The history of tax payments pertains to financial obligations associated with the property, while a list of lien holders relates to financial interests and claims against the property. A set of rules governing property development refers to zoning laws and regulations, which are outside the definition of a chain of title.