There are two different ways of owning and indexing real property in Minnesota: Abstract Title and Torrens (Registered). Registered land is more common around the Twin Cities area, while rural counties have more Abstract land. The Torrens System has been used to promote land development, but it is still not widely used in the United States.
An Abstract Title is the most common type of recording in rural counties. An Abstract Title is a “book” of all deeds, mortgages, and other documents relating to a particular piece of land. These documents include all those that affect the title to the property. This information is compiled in an abstract or title report by an abstract company. Ownership of an abstract property depends on a continuous 40-year chain of title, so every deed and mortgage from the past forty years must be reviewed to determine if anyone other than the deed owner has a claim to the property. When property is sold or mortgaged, the new owner or lending institution will conduct a title search to determine if the property is clear of liens or encumbrances. Abstract property may be registered to become Torrens property.
With Torrens Property, the owner is issued a Certificate of Title, which forgoes the need for a chain of title. A person who owns Torrens Property is assured that no one else has any claim to the property. Each time an owner voluntarily transfers property, a new Certificate of Title is created. Only information that is currently relevant to title is shown.
A potential buyer can examine the Certificate of Title to determine the owner of real estate. If the land is transferred involuntarily (for example, by mortgage foreclosure), either the district court or the County Recorder reviews the transfer to make certain that a new certificate of title can be created.
Once a Torrens title is registered, no one can gain adverse possession rights against the title.