Land Title Talk

Where do Title Claims come from? Do they fly in from outer space? Does the man on the moon make them? Does the stork bring them?

Nobody really knows where title claims come from-just kidding. They come from the person suing you because they feel they have rights that you’re infringing upon. The issue is you don’t know they’re coming.

Often the birds and the bees of title claims are human error-honest mistakes made at the courthouse, or an omission in public records. Sometimes there’s a disgruntled heir who comes forward after being written out of the will of a previous owner, or a disgruntled step-son who feels in the divorce mom didn’t get what was hers. And every now and then there’s a case of fraud or forgery. Many title claims come from a simple property line dispute-not the whole parcel, but a matter of a few feet. Regardless of where title claims come from, you never know if one’s going to land on you.

Title Insurance is like a nest egg. For a nominal one-time feem you can buy Title Insurance at closing, then no matter where a title claim come from, you have that policy to pay for the legal defense of your property ownership rights.

Legal costs to defend real estate ownership rights are a beehive of expenses, but if you have the nest egg of Title Insurance, you can crack the yolk over the sting of legal fees.

Next Blog Topic: “How Babies Are Made” – just kidding!

When I testify in court for Rusty, he asks me my name, if we’re related, and how we’re related. I always say that Rusty is my big brother…because he is.

I recently testified at one of Rusty’s foreclosure hearings and I was surprised how many people don’t understand a Truth In Lending form, including the opposing counsel who represented the lender-he didn’t understand anything about the Truth In Lending form. It was very humbling to realize when I’m in a closing room with a customer how important my role is to make sure that buyer understands what Truth In Lending means and all the other closing documents.

The Truth-In-Lending Act (TILA) is a federal law that requires disclosure of a truth-in-lending statement for consumer credit. The statement includes a summary of the total cost of credit, such as the annual percentage rate (APR) and other specifics of the credit.

For people buying real estate, they rely on my expertise and knowledge to explain the deal they’re signing and make sure they know what they’re getting into. Rusty is my big brother, but sometimes I get to be the “big brother” for other people.

The Washington Post published a list of useful words you won’t find in the dictionary, including:

“Cashtration” (cash-tray-shun) – the act of buying a house, which renders the subject financially impotent
“Reintarnation” (re-in-tar-nay-shun) – coming back to life as a hillbilly
“Dopeler effect” (dope-lur) – tendency of stupid ideas to seem smarter when they come at you rapidly

I’ve got a word to add to the list: “Ambiguilty” (am-bi-gil-tee) – the state of being at fault for filing a totally bogus title claim against a rightful property owner. This is a term that applies to attorneys.

Real estate could be unfamiliar territory, but that doesn’t stop some attorneys who think they’re jack-of-all-trades-master-of-none from trying to knock down your door with a ridiculous challenge to your ownership.

Regardless of how bogus that claim is, the homeowner is responsible to defend himself in a court of law. And that’s costly. Have you priced a legal defense lately? Have you taken out a second mortgage lately?

Some attorneys are ambiguilty of imaginary title clouds that could cost the homeowner big bucks. The attorneys don’t know any better so they file a claim that they’re not going to win because they don’t know any better- a circular situation that can leave you spinning.

Don’t let lawyers charge you out of house and home when a title insurance policy provides a legal defense for your ownership rights (or pays out the policy amount if needed). Protect yourself from ambiguilty attorneys-get title insurance.

Some men are born to live at ease, doing what they please, richer than the bees are in honey… the rest of us have to work for a living!

Buying a home is for many of us the largest purchase we’ll ever make. It takes a lot of hard work to afford to live where we live, but we get the benefit of shelter-a place to gather, a place to rest and play, and a safe place to raise our children. A home is a very costly part of our lives, and a very beneficial part.

Hard earned homes can be compromised if a title claim is made against the property. Even if that claim is illegitimate, the homeowner has to defend his title in a court of law. Litigation expense can exceed the property value, making a legal defense cost prohibitive.

However, title insurance can help a homeowner protect his purchase. At a fraction of the cost to hire an attorney, a title insurance policy pays court costs to defend the homeowner’s ownership.

Protect your purchase with title insurance, then all is not lost in the event of a claim or challenge. A title insurance policy is something I hope you’ll never use, but if you need it, it is all for the best.

With a Warranty Deed, the grantor fully warrants the title to the said land, and will defend the same against lawful claims of all persons whomsoever. You don’t get that with a Quit Claim Deed.

When someone deeds interest in a property via Quit Claim, he conveys or gives all interest he has IF ANY

. What if he doesn’t have any interest in that property? A Quit Claim Deed provides no warranties. DON’T DO IT.

Furthermore, because Quit Claim Deeds carry no warranties, they void title insurance policies. Yeah, so not only do you have no warranty on the deed, you also have no insurance to protect you from financial loss should someone challenge your ownership of the property.

A Quit Claim Deed is a great way to “clean up” title, but it doesn’t guarantee anything. It can also be a conduit for fraud, and you really don’t want to be on that end of the stick.

With very few exceptions, always get a WARRANTY DEED instead of a Quit Claim Deed.

I lined up the shot- a three-pointer from the other side of my office, over my desk, aimed at the trashcan under the credenza. I angled my stance, checked the wind speed of the A/C draft, and released the paper wad from my hand…. It arced gracefully to clear my workstation and was on target to drop through the rim without touching. Then the air conditioning kicked on and knocked my perfect shot out of orbit. The paper wad quickly lost altitude and landed on the floor-I was so close! My staff did not applaud. Close only counts in horseshoes-not in basketball and certainly not in land survey.

A survey on a piece of real estate can’t be “close”. A survey defines the amount of land you pay for (or will be paid for) and is the basis of your living space-easements and set-backs.

Get a survey before you buy. Even if you are purchasing within a platted neighborhood where colorful flags “outline your lot”, get survey. It can mean the difference between where you put your jacuzzi and being in hot water.

The problem is, if you encroach on someone else’s property, not only do you decrease their lot, you also throw off the set-backs they’re required to have.

A swimming pool in the wrong place tends to water-down relations between neighbors. A poorly located drain field is even worse! When stuff like that hits the fan, amicable next door residents can become nasty neighbors in a hurry. No, “close” definitely doesn’t count in land surveys.

Get your survey when you purchase, and get title insurance to cover any in accuracy on the boundaries. There’s a lot at stake. Survey errors can happen, but if you have title insurance without a survey exception, you don’t have to pay to fix the mistake. Title insurance pays for the defense of your ownership and will pay for valid claims, such as an error on your survey. ( The ALTA 9 endorsement will probably be a good idea also.)

Be close in horseshoes, be close with your neighbors, but when it comes to putting up a fence, know where your boundaries are and follow them.

I said a bad word on the radio- “Quit Claim Deed”. Don’t say that in front of your mother or write it on the bathroom wall!

When you convey a property using a Quit Claim Deed, you give all interest you have in that property IF ANY– but you may not have any interest. There are no warranties.

Let’s say Henry bought a nice home from a family member and paid cash. Because the transaction was among family, everybody decided to save cost and do the transfer without an attorney or title company. They’d heard from their friend that because there was no closing involved, it was a fast transfer of interest, it was a QUICK claim deed. (Please pay attention to the spelling- it’s a quit claim deed, not a quick or fast deed.)

DON’T DO IT. By using a Quit Claim Deed, the title insurance policy on the property was voided. Quit claim deeds are great for cleaning up title related issues, but not much more.

(Quit claim deeds can also be an easy way for someone to commit fraud.)

With few exceptions, always gat a WARRANTY DEED instead of a quit claim deed.