All posts tagged: Title Insurance

WHY DO YOU NEED A TITLE COMPANY?

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At Land Title of America, Inc., we’re not just an air-conditioned office full of friendly faces.  We’re here to help—in the immediate sense when you have a real estate closing, AND if there’s a problem.  If someone questions the real estate title to your home, you can walk in our front door and receive assistance in defense of your ownership rights.  Our services breakdown into three parts:

  1. Real Estate Closings – Yes, one function of a title company is to conduct real estate transactions. It’s a process, and it starts with a title search. We examine public records to make sure the chain of ownership is strong.  If we find a weakness, then we assist the seller in addressing that weakness.  We’re also watching the clock and the punch list to make sure surveys are done, inspections are made, and the money is in place.  We make sure funds are distributed correctly and documents are recorded into public record.  We want all parties involved to walk away from the closing table satisfied that their deal has been done as specified in the real estate contract.
  2. Title Insurance – Title companies sell title insurance. Though title insurance is not required by law, it’s normally a contractual obligation, and a real good idea.  Furthermore it’s a real good deal at a low cost that gives you a lot of financial protection on your real estate investment.  While title companies research every detail to minimize risk to the new owner, they also offer (at a one-time, low cost fee) an insurance policy that financially protects that owner from claims against his or her ownership.  The title search is an analysis of the situation, but it’s no guarantee; title insurance is the financial protection in case the title search doesn’t catch something.  Title insurance provides and pays for the legal defense of your real estate ownership should somebody challenge your rights to the property.
  3. If There’s A Problem With Your Real Estate Title – If someone questions your ownership to your home, you’re going to want a title company that can help you stand up for your rights by providing legal representation and paying for it.

It’s a bad day when a customer walks through our door because someone has filed a lawsuit against them, claiming ownership to their home.  But it’s good when we can be a big part of the resolution by putting that title insurance policy to work.  That’s what a title company like Land Title of America, Inc. is there to do.

Land Title of AmericaWHY DO YOU NEED A TITLE COMPANY?
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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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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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Title Insurance is Champion of Ownership Rights!!

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In the never-ending battle for truth, justice, and clean title to real estate, Title Insurance is the champion of your ownership rights!  From easements to inheritance, no claim is too small or too large for an Owner’s Title Insurance Policy—your Title Insurance company is there to fight for you!!

Superhero1

Keepin’ It Real

Title Insurance puts the real in real estate.  Should you have a claim against your deed, Title Insurance will meet the challenge to your ownership, providing the legal fees and the attorney to do battle in court if necessary.  (Even if your court battle loses, you still get the policy amount.)

When you obtain property, don’t walk—fly to make sure you have the proper coverage to fully insure your real estate title!!  It’s a one-time fee, normally paid at closing (but can be acquired at any time), and costs a lot less than hiring an attorney on your own.

Furthermore, Title Insurance is also a proactive measure as well as a defensive strategy.  The cost includes a title search to address any questions in the chain of title that appear in public records.  Once that’s done and any issues dealt with, then the policy insures against any questions that may arise in the future, but aren’t necessarily revealed in public records.

One good deed deserves another!

And later when you convey your property to a new owner, your Title Insurance policy continues to protect you from possible challenges for which a new owner could hold you liable.

Title Insurance – It’s good for now, it’s good for later, it’s good for what happened in the past, and it’s good for you!!

Stephen CollinsTitle Insurance is Champion of Ownership Rights!!
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A Deed Among Family?

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Who needs a deed among family members?  The family members do!!  Good deeds support good relations among kin, especially when inheritance gets involved.

When property changes hands from branch to branch on the family tree, keep the paperwork in order and maintain title insurance so that ownership rights can be properly recognized and defended should a dispute arise.  Don’t take shortcuts just because it’s family—don’t take shortcuts because it IS family!!

A major source of title challenges is from family transactions in real estate.

Even if the old homestead has been in the family for fifty years, property disputes can happen at any time.  Family disputes tend to be the biggest and most emotional.  When there’s a lot of emotion, there’s no rational—and it’s costly!  Want to help an attorney pay off his college loan, pay for litigation on a family dispute.  When somebody says “I’m fighting this for the principal of the matter,” they usually mean:  “For all the principal in your bank account!”

It’s expensive to be totally right!!  Have you hired a lawyer lately?  Remember, if a person—family member or otherwise—files a claim against your property, YOU have to pay for the legal defense of your real estate rights.  Title insurance covers those court costs and provides the legal representation.

Whether Uncle Elmer thought your daddy left the place to him, or Cousin Jesse claims your septic tank is on her side next door, a title insurance policy provides the financial and legal means to assert your ownership rights.

As of March 2011, a lot of companies started issuing the new and improved title insurance forms which allowed for those who inherit property to also inherit the title insurance.  But any policy issued without the updated forms is not assumable to heirs; therefore, even though granddaddy had coverage, it doesn’t mean you do.

Don’t know if your inherited property came with title insurance?  Land Title of America, Inc. will be glad to check—it’s a free service—just stop by our office located on U.S. Highway 1 South in St. Augustine (in the Lewis Point Plaza) or give us a call:

Land Title of America, Inc.

2495 U.S. Highway 1 South

St. Augustine, Florida

(904) 797-9600

 

 

 

Stephen CollinsA Deed Among Family?
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Please, Please, Please Get A Survey!!!

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I am not making this up, though I wish I were. Maybe by sharing this story I can prevent you from making the same mistake of not getting a survey when you purchase property. (Please note that certain aspects of the story have been changed to protect the identity of those involved.)

This is the tale of an older lady who thought she was getting a deal on a distressed property with a house. She paid $35,000 in cash and closed without a survey…because she didn’t need one because she was paying cash—you only need a survey if there’s a bank involved, right? She moved into the house and lived there for six months before she found out what she had actually paid for was the four acres of vacant land behind the house.

The house had been winterized, there was a sign out front, and the buyer lady was using a Realtor. The buyer paid cash for a Bank-Owned Property (or REO), and closed without a survey. The legal description of the contract used the abbreviated tax reference. The bank had winterized the wrong house, and six months after the buyer was in full possession, the couple from California who owned the house politely informed the lady that she was in her house.

The lady had purchased the four-acre piece of property behind the one acre up front where the house was. Now she’s going to have to pay another $64,900 for a home and land she thought she already owned. She didn’t have a clue. She had paid $35,000 for four acres of vacant land worth about $11,000—an expensive mistake! She just spent $29,900 to find out what a $300 survey could have told her. What she thought was a good deal turned out to be a nightmare all because she wanted to save $300 on a survey.

For the bank, “AS IS” is “Where Is.”

Please, please, please don’t make this mistake—GET A SURVEY!!! Without a survey, title insurance can’t cover you for this kind of error. Spend a few hundred dollars on a survey, even if it’s a cash deal—ESPECIALLY IF IT’S A CASH DEAL. Spend a few hundred dollars on a survey to save thousands of dollars in a mistake.

If you are paying cash, you need a survey more than ever because your cash is the money at risk.

Really this is Reason Number 2 to get title insurance (Remember: the Number 1 Reason is because it’s expensive to be innocent!). It shows up on my true story list of “1001 Reasons to Get Title Insurance” as Number 7.

Stephen CollinsPlease, Please, Please Get A Survey!!!
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What You Don’t See Can Really Bug You

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In June 2014, my band OE-2-KB (Old Enough-2-Know Better) had a gig along the St. Johns River.  It had rained all day, but Eddie said he had a thousand-foot tarp that we could put over everything.  So we started setting up and we were watching the radar…and wondering if that tarp could really cover all of our band equipment.

There were a few little blind mosquitoes around, but they didn’t bite, so no big deal.  We played our first set, took a break, and came back.  By then it was very obvious the atmosphere had changed—there were blind mosquitoes everywhere!!  At first I thought they were just around the lights, but they were everywhere!!  Still, they didn’t bite, so we started our second set.

It was like the plagues of Moses—the blind mosquitoes were in our mouths, in our ears, and all over the keyboards, the guitars, the drums.  I’ve never seen anything like it before.  My brother, Rusty, had pages of music stuck together with dead bug bodies.  We had been worried about the rain, but what we didn’t see coming that stopped the music.  The same can be true of real estate title claims.

Owner’s Title Insurance addresses not just the title problems you can see in public records, but also the hidden risk.  

Home ownership should be hassle-free.  You should be able to check the radar, have a big tarp handy to cover everything, but even so, challenges to your ownership can happen.

Most property disputes are something small—not a big claim like fraud or forgery on a deed, or someone trying to claim ownership of the entire property.  Usually it’s a matter of feet, an encroachment.  It’s the freak bizarre things, and you just don’t see them coming—that’s why you get title insurance.

Title Insurance provides an initial service when you pay for it—a title search—and provides a secondary service—legal representation and / or compensation of the policy amount—at no additional charge to you should the title come into question.   Title Insurance can’t always prevent an attack on home ownership rights, but it can shield the Homeowner from court costs in a legal defense of property title.

Title Insurance helps keep title claims from bugging you.

(If you’re looking for OE-2-KB, you can keep up with us on Facebook at https://www.facebook.com/OE2KB or our band website at http://www.oe-2-kb.com.)

 

Stephen CollinsWhat You Don’t See Can Really Bug You
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