Types of Property Records, Taxes, and Laws

Oct 11, 2022 - By Ariana Manikas

Buying or selling property requires paperwork for the government and the owner. Every aspect of a property transaction is documented from deeds to engineer reports on boundaries to mortgages. Laws requiring transparency in taxation mean most property records are public, based on purchase and sale information. Boundary documentation is also public and therefore must be available to those who are researching it.

What are Property Records and What They Include?

Property records include any document of a property's boundaries, value, and ownership. These are kept in public places such as city hall, the city clerk's office, the registry of deeds, or the county land office. As public documents, anyone may request the records. These records reveal a lot about the size and condition of the property and the financial health of the owner.

Which Property Records are Public Records?

A few documents related to property transactions are not public, such as the owner's mortgage application and other documents containing personal information. By law, most records that are included in the recording of a deed transaction are public, including:

  • The title reflects the historical chain of ownership.
  • The boundaries of the property and whether they have changed.
  • A property description that includes information about any additions or alterations.
  • Any liens attached to the property for things like unpaid taxes due to the city or town.
  • The property's tax history may reveal changes due to renovations or additions.

Deeds are the documents that convey ownership, naming the grantor (seller) and grantee (buyer) and any conditions of the sale. There are three types of deeds:

  • A grant deed guarantees that the sale is by the legal owner and clear of encumbrances.
  • A warranty deed protects the buyer (grantee) because it offers the same guarantees as a grant deed plus promises that the grantor (seller) will handle any challenges to the title.
  • A quitclaim deed offers the least protection to the buyer and is most often used for property transfers within families, such as a spouse releasing their ownership stake during a divorce.

How to Calculate Property Tax and Average Tax in the USA

Taxes are calculated on evaluations of individual properties. City or county officials called assessors visit properties periodically to review any changes or renovations. Square footage, condition, and use (residential, industrial, or commercial) are all part of this calculation which results in a figure called the assessed value. Then the assessed value is multiplied by the tax rate, resulting in the property tax amount.

If taxpayers disagree with the assessed value of their property, they may file an appeal for a re-evaluation. The local taxing authority must address each appeal for tax reduction, called an abatement. The records created during the process are public documents.

Property tax rates average around 1 percent of a property's value in the U.S. Each town or city sets its property tax rate. Be aware that a low tax rate doesn't mean the tax bills in that area are low because a low rate may reflect higher-than-average property values, such as in Hawaii, where the property tax rate is below .5 percent, but median property values there are among the highest in the country. This means property owners in Hawaii pay roughly an equivalent property tax to those in Minnesota, where the average property tax rate is 1.1 percent but where average property values are lower. Residents of both states pay an average of $1,600 per capita for property taxes. Outliers include the states of New York, Connecticut, and New Hampshire, where the average property tax per capita is around or above $3,000.

What is a Registry of Deeds?

Where and how land transfers are recorded differ a little from state to state and the local system of property records. In some states, property transactions are filed at the Registry of Deeds. This office is part of the county government. It retains the records created by property transactions in the county or geographical region.

A registry documents property transactions and is the place to research histories of boundaries and ownership to determine clear title, which is necessary for a successful sale. However, when researching a deed to determine clear title, the registry is not the only place to look.

Can Judgments and Foreclosures be Part of Property Records?

Judgment liens and foreclosures can be part of property records. Both are results of court decisions. If there is a judgment lien attached to the title to a property, it cannot be removed until the lien is paid, or the property is sold. The lien amount is taken from the sale price when the property is sold.

Buyers may not be aware that judgments against them, such as a civil court lawsuit decision, may be attached to property in the future. So, even if a property is not purchased until after the judgment is rendered, it can be attached to a property later.

Explain Recorded vs. Registered Property Titles

The majority of titles to land are recorded at the Registry of Deeds, which comes with a caveat emptor: it’s up to the buyer or their agent to ensure the deed is clear from encumbrances and disputes before transferring ownership. The process of researching titles and deeds is why most people use qualified title agents to navigate the process. If a lien is not discovered and resolved as part of the sale process it can become the responsibility of the new property owner. This is why title insurance is required by most mortgage companies.

Registered properties are the domain of Land Court and fall under the Torrens system, which uses a numerical system to catalog properties and titles. Registered properties fall under Land Court jurisdiction because it has settled ownership or boundary disputes related to that property in the past.

Are Mortgages Public Record?

Public documents show the name of the mortgage company used to finance a property, but it's unlikely that the application sent by the homeowner is a public record. A mortgage is a type of voluntary lien that shows up in public records searches. If there are multiple mortgages or a particularly large mortgage on a property for sale, it's possible the owner is in financial trouble. Under such circumstances, the sale of the property may get tied up in a bankruptcy proceeding. Bankruptcy records are public documents.

How to Check Lien on a Property

Liens are recorded on property deed information. Liens can be any loan or obligation that can be attached to the property asset. These encumbrances are obstacles to selling the property because they must be satisfied to complete a sale. Paying off liens as part of a sale can complicate the process. The presence of liens can also indicate the property owner's financial health and willingness to negotiate the price. Liens are both voluntary and involuntary and can include:

  • Mechanics liens – this is a way of making the home a promissory note for work done to it such as a new roof, driveway, or windows. Mechanics liens are generally voluntary and released when payment is made in full. 
  • IRS liens – these involuntary liens are attached by the government for nonpayment of taxes.
  • Judgment liens – these involuntary liens are attached by courts to compel individuals to pay sums awarded in legal cases.
  • Child support liens – if an individual falls behind in child support payments, a lien may be attached to their property to ensure eventual payment. These are similar to judgment liens.
  • Property tax liens take priority over all other forms of encumbrances. State and local governments attach these to compel the property owner to pay taxes owed.

Along with the above liens, individuals should also check for things like town betterments (charges) for links to public water and sewer, outstanding utility bills, and unpaid balances for homeowner’s association fees and related property improvements before taking ownership of a property.