Stephen Collins

Logical Conclusion: Owner’s Title Insurance

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This statement is untrue:  the title to your house is clean.

Now, if your home title is clean, then the statement is false, which means your home title has an issue.

…On the other hand, if your home title has an issue, then the statement is true (as being untrue), which means you do not have a title issue.

You could sit there and try to work that out…or you could just get Owner’s Title Insurance.

Owner’s Title Insurance offers financial protection to homeowners in any scenario.

Even if you get a title search, you cannot say conclusively that your property title is clean.  A title search can only see what’s in public records.  It doesn’t account for an old deed in somebody’s sock drawer, or a clerical error, or a previously unknown heir (they happen!!).

While a title search is a necessary precaution to deal with any known problems, Owner’s Title Insurance covers the hidden risk of possible title challenges.

Furthermore, title insurance is low cost, and it’s a premium you pay only once, which covers you for as long as you own the property…and forever after you convey it, covering your financial liability for your link in that chain of title.

Logical Conclusion:  Owner’s Title Insurance is the most cost effective way to financially protect yourself from title issues on your property from now through forever. 

 

Stephen CollinsLogical Conclusion: Owner’s Title Insurance
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Attorneys Who Write Title…The Conversation Continues

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We appreciate people reading our blog, and we’re glad to have received a comment on our recent post about attorneys who write title insurance in the same transaction (“Attorney Mistake in Writing Title” http://staugustine.com/interact/blog-post/stephen-collins/2015-05-20/attorney-mistake-writing-title#.VcNx4flViko ).   The reader brings up some interesting points, which we’d like to address.  Please see the reader’s comments and our responses below.

 

  1. Reader Comment: “…there is absolutely nothing wrong with an attorney representing a client in a real estate transaction in which they also write the title insurance policy.”
  1. Land Title Response: If you understand the role of the title insurance company, how can that not be a conflict?

 

  1. Reader Comment: “There is nothing in your example that has anything to do with the fact that the closing agent was an attorney.”
  1. Land Title Response: I agree to a point, we take no issue with an attorney title company; we take issue with an attorney as a title company and representing the client in the same transaction.

Had there been a separate attorney in the example, one attorney would help the other to complete the fiduciary responsibilities for the buyer.  Even good people in desperate times do desperate things.  An attorney representing the title underwriter and a separate attorney representing the buyer is the best way to represent the buyer’s interest.

 

  1. Reader Comment: “I could give many more examples of incompetent title companies that have created title defects because of their mistakes…”
  1. Land Title Response: Title insurance companies make mistakes, you are exactly correct. Incompetent title insurance companies and incompetent attorneys are the woe of property owners.  What better way to prevent that, than to have a separate attorney, one who represents only the buyer/seller’s interest?

 

  1. Reader Comment: [Continuation of previous comment:] “I could give many more examples of incompetent title companies…drafting documents outside of what is allowed by the Florida Supreme Court or by advising buyers or sellers about the closing documents.”
  1. Land Title Response: I agree that this is a problem; however, as I stated earlier, the best way to handle a real estate transaction is to have an attorney title company or a title insurance company writing the title insurance policy and a separate attorney represent the buyer.

Please note though, under issuance of the title insurance commitment, title insurance companies are allowed to issue legal documents to facilitate the transaction.

 

  1. Reader Comment: “…an attorney can legally explain the closing documents to their client, point out any problems with the survey, and also explain the impact of the title exceptions…”
  1. Land Title Response: You are correct; an attorney can explain all those things. An attorney who doesn’t write the title insurance for that particular transaction is the best person to do so because he can truly represent his client without conflict with his contractual obligation to his title underwriter.  How do you eliminate risk for the title insurance underwriter with whom you have a contractual obligation without increasing risk for your buyer?  On the other hand, how do you eliminate risk for your buyer without increasing risk for your title insurance underwriter?  To think that their interests are aligned is correct…unless there’s a title claim, and then their interests are at great odds.  Which side of the fence are you going to be on as the attorney who wrote the title insurance and issued the title policy for the same transaction?  When your buyer comes to you and says, “I need you to sue the title company?”  Will you be able to?  Will you be able to represent your buyer?  Or will you be able to tell them?  How much better would it be if your buyer came to you and asked you to represent them in a title insurance case in which you did not also write the title insurance?

 

  1. Reader Comment: “What you described as happening with that attorney in Pennsylvania has nothing to do with the fact that they were an attorney.”
  1. Land Title Response: I agree with you 100 percent.

 

  1. Reader Comment: “…how would closing with a non-attorney title company be any better since they would not represent the buyer’s or seller’s interest either?
  1. Land Title Response: It wouldn’t. We have no issue with an attorney title insurance company.  In some cases, if an attorney title insurance company specializes in real estate, they can be a great choice.  The only issue is when that attorney writing title insurance feels they can represent the buyer and the title insurance underwriter at the same time.  Conflict.  Conflict.  Conflict.  Anyone who does that is looking at the sun and denying it’s there.

 

To see the original post, “Attorney Mistake in Writing Title” along with the original reader comment, go to http://staugustine.com/interact/blog-post/stephen-collins/2015-05-20/attorney-mistake-writing-title#.VcNx4flViko .  Again, thank you to all our readers.  We appreciate your sincere consideration of these important aspects of property ownership, and encourage your dialogue in this ongoing conversation.

To speak with us directly, you may contact us during business hours (EST) by calling our office at (904) 797-9600 or Live Chat with us here on our website.

Stephen CollinsAttorneys Who Write Title…The Conversation Continues
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Congrats Habitat for Humanity of St. Johns!!

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It took 486 Volunteers only 108 Days to make homeownership come true for a local family.  Congratulations to Habitat of Humanity of St. Johns for the completion of another home in St. Johns County!!

Habitat for Humanity of St. Johns has helped over 100 families realize homeownership in our county, allowing them to establish a stable home environment in which to learn and grow and share with each other.

Habitat for Humanity/St. Johns offers homeownership to St. Johns County residents based on need, ability to pay, and willingness to partner with the program.  Qualified applicants put in 250 to 400 sweat equity hours on the construction of their home—it’s a hand up, not a hand out.  The home is then sold to the new homeowner with an affordable monthly mortgage payment.

It’s a great deal for a new homeowner, and a great deal for our community!!

Congratulations to Delores Washington on your new home, and congratulations to Habitat for Humanity/St. Johns for building hope.

If you would like to contribute or learn more about Habitat for Humanity St. Augustine/St. Johns, please visit their website at www.habitatstjohns.org or call (904) 826-3252.

Stephen CollinsCongrats Habitat for Humanity of St. Johns!!
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Attorney Mistake in Writing Title

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Attention Attorneys who represent their clients in a real estate transaction AND write title insurance for them in the same transaction:  I want to talk about CONFLICT OF INTEREST.

How can an attorney objectively write a Title Insurance Policy and represent a client in a real estate closing?  Who does the attorney really represent?  Answer:  The Title Underwriter.*  That attorney has a contractual agreement to represent the title insurance company first—the homeowner’s interest is subordinate.  How is that for proper legal representation of the homeowner?

An attorney who writes title insurance AND represents a client IN THE SAME CLOSING doesn’t really care about the client, and violates the mutual trust of an attorney-client relationship.  

An attorney who writes title insurance and practices law is fine, as long as that person doesn’t represent a client in the same transaction.  A title insurance company owned and operated by an attorney?  No problem—I’ll compete with you all day long.  But if you try to represent a client in the same transaction in which you write the title insurance policy, then I take issue with you—CEASE AND DESIST IMMEDIATELY for the sake of your customers!

Let me tell you a little story about a lady named Sheila.  Her attorney/closing agent never recorded the deed and mortgage.  After paying nearly $70,000 into the loan, Sheila goes to refinance only to find out she doesn’t actually own the house she’s been living in for almost four years.

Problem 1:  The attorney who supposedly represented Shelia has a contractual relationship with the title company who now has a title problem.

Problem 2:  That attorney was suspended for three years.

Problem 3:  The title policy was never issued.

Problem 4: The title company where the attorney/closing agent worked refused to pay for the title error.

Problem 5:  Sheila’s going to have to pay new closing costs to have her deed filed.

How could this have worked differently?  

Sheila could have hired an attorney whose interests were only aligned with hers.  Her attorney could have made sure all documents were properly recorded and a valid title policy issued, insuring her against any title questions.  (But instead Sheila had a selfish attorney who tried to represent her and the underwriter, and when the doggie doo-doo hit the fan, Sheila was left without representation and without insurance.)

Any questions?

This is a true story that happened in Pennsylvania—how many stories don’t we hear about?  In how many cases is the result of dual representation so devastating the homeowner victim can no more afford to fight than they can afford to live in the house they thought they owned?

“This case is a perfect example of why people have to hire their own attorney when dealing with this much money,” said Pennsylvania real estate lawyer, William Mackrides, about Sheila’s situation.

There’s no way this woman’s problem would have gotten this far if her attorney hadn’t also been her title agent.  Sheila’s story shows why you cannot just rely on the attorney who writes your title insurance to also represent you.

Everybody’s human.  Everybody makes mistakes.  The separation of representation—the homebuyer’s attorney and the title company—adds an objective checkpoint so that each party’s interest is fully represented without bias.  

There are a lot of fine attorney/title agents out there, and when they play title agent only, that’s great.  But if you think your attorney/title agent has your best interest in mind first, then you could be $70,000 wrong.

 

* If financing is involved, then the attorney has a contractual obligation to represent the title underwriter first, then the lender, and finally the homeowner.  Thus the homeowner would be third in line for legal representation.

 

Stephen CollinsAttorney Mistake in Writing Title
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Land Title Talks about Environmental Impact and Property Ownership Rights

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Hosts Stephen Collins and Rusty Collins talk with Robert Kessler of Environmental Heritage Investors, LLC about the environmental impact on property ownership rights. Hear about what to do if you have a protected species of animal, like a gopher tortoise, on your property prior to construction or what to do if your neighbor redirects water onto your property.

Stephen CollinsLand Title Talks about Environmental Impact and Property Ownership Rights
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