All posts tagged: Title Insurance

Sense of Wisdom & Humor

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Why are there more jokes about attorneys than about title companies?  Because nobody understands what title companies do, answers my attorney brother, Rusty Collins.  Now that’s funny, but it’s sad too.  You can lose your sense of humor real fast if you lack a sense of wisdom about real estate ownership.  Without knowledge of title insurance, your stake is at stake, the land you own and the money you put into it.

Title Insurance helps to protect your financial investment in real estate.

Title Insurance is a policy that protects the real estate owner from financial loss due to a challenge against his or her real estate ownership.  Without it, you could lose your property and your financial investment.  In simple terms, Title Insurance works in two ways:

  1. Prevention
  2. Protection

Though title insurance works mostly through prevention, it offers security via financial protection from the massive costs of litigation and other legal expenses should a problem, challenge, or complication to a Florida homeowner’s title arise.  No matter how much effort is put into this prevention, bad things can still happen.  It’s expensive to be right when someone thinks you’re wrong.  Owner’s Title Insurance provides and pays for all costs associated with a title claim (whether through settlement, legal defense, and / or reimbursement of the policy amount to the homeowner if that defense does not prevail).

Knowledge is realizing the difference between an acceptable risk and an unacceptable risk.

Wisdom is taking precautions to avoid unacceptable risk.

If you value your land, I encourage you to learn more about Title Insurance, and Land Title offers a variety of free educational resources, including the following:

  • Land Title Blog at www.GoLandTitle.com
  • “Land Title Talk” radio show every 1st and 3rd Thursday of the month on 102.1 FM WFOY (http://www.1021news.com) from 8 to 9 am. Listeners are encouraged to call in with your real estate-related or legal questions or comments
  • Call or stop by the Land Title Office. If you have questions about a title policy and what it can do for you, or if you need to find out if your property even has a title policy, we’ll be glad to assist you at no charge.  Land Title is located in the Lewis Point Plaza at 2495 US Highway 1 South, St. Augustine, or call us at (904) 797-9600.

 

Stephen CollinsSense of Wisdom & Humor
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Claims Versus Reality in Title Insurance

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The perception of Title Insurance is that for every $100 that gets paid into the pot, only $6 of that gets paid out.  The reality is that for every $100 paid in, $94 goes into making sure no more than $6 will have to go towards a title claim.

While Title Insurance takes on the financial responsibility for title-related issues, that financial responsibility is limited to the policy amount—the cost is much greater than what’s covered.  The power of Title Insurance is the preventative work that goes into it.

Title Insurance is NOT casualty insurance—Title Insurance is PREVENTATIVE insurance.

Coverage:

Title Insurance coverage is unique because it reaches both forwards and backwards at the same time to protect the homeowner.

Title Insurance is good from the beginning day of the policy backwards.  It covers everything that happened before the real estate acquisition, including all unforeseen title flaws, and the policy pays for litigation should someone challenge the ownership through a lien, claim, or taxes.*  Thus the coverage protects the homeowner during their ownership of the property and for everything that happened before they took title.

Title Insurance insures the homeowner’s financial interest forwards into the future, even protecting them after they sell that property.  Because the Contract for Purchase and Sale typically requires the Seller to convey ownership with warranties, the Seller becomes responsible for anything that has ever transacted on the property. Thus the homeowner retains liability for their link in the Chain of Title even after they sell.  A Title Insurance Policy protects the homeowner for as long as that person has a financial liability to the property…which is until death.

Service:

The Title Insurance company’s objective is in lockstep with the consumer’s best interest:  to avoid questions or challenges of the homeowner’s title.  Owner’s Title Insurance is primarily for prevention of claims against home ownership, and a title search is part of the risk assessment.  Thus in the examination of public records, the title company has a vested concern to find any and all complications to the ownership title, in fact to kick the proverbial sleeping dog…on purpose.  We’d rather find out now (rather than after the fact) whether or not that dog has teeth and a temperament for biting.

Though Title Insurance works mostly through prevention, it offers security via financial protection from the massive costs of litigation and other legal expenses should a problem, challenge, or complication to a Florida homeowner’s title arise.  No matter how much effort is put into this prevention, bad things still happen.  It’s expensive to be right when someone thinks you’re wrong.  (Just remember, another person’s perception is reality.)  Owner’s Title Insurance provides and pays for all costs associated with a title claim (whether through settlement, legal defense, and / or reimbursement of the policy amount to the homeowner if that defense does not prevail).

Cost:

The cost of Owner’s Title Insurance is promulgated by the State of Florida, and the current rate has been the same for over 20 years.  It is a nominal fee compared to litigation costs.  Furthermore, Owner’s Title insurance is a one-time fee, typically paid at the closing of a real estate transaction.  Once it’s paid, it’s paid—no monthly premiums, no annual fees—no additional charge to the consumer, the homeowner.

With Owner’s Title Insurance, consumers pay a set amount for financial protection against the unknown cost of hidden risk to home ownership. 

The Big Picture:

Title Insurance plays a vital role in Florida’s recovering housing market.  As a source of financial protection, Owner’s Title Insurance assures potential Florida buyers they can invest in real estate with stable value backing that investment.

Owner’s Title Insurance adds real value to real estate rights, thus it benefits every Florida citizen.

Any further questions, tune into “Land Title Talk,” on the First and Third Thursday of each month from 8:00 to 9:00 a.m. on 102.1 FM WFOY (http://www.1021news.com).  Please call or text during the show to comment or ask about real estate-related issues.

*Please note Title Insurance does have exceptions.

 

Stephen CollinsClaims Versus Reality in Title Insurance
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How Do You Know If Your House Is Possessed?

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Welcome to Poltergeist Heights!  An Owner’s Title Insurance Policy not only says, “This house it clean!” it insures it.

Welcome to Poltergeist Heights! An Owner’s Title Insurance Policy not only says, “This house it clean!” it insures it.

The easy answer is to get a Title Search.  The best answer is to get Title Insurance.

Possession is a huge deal in real estate.  The big problem is that past owners can come back to haunt your property.  A Title Search is good, but it only sees what’s in the public records.  (A Title Search cannot see the deed filed in Uncle Bob’s sock drawer that gives ownership of your house to Cousin Delilah.)  Whereas an Owner’s Title Insurance Policy not only says “This house it clean!” it insures it.

Title Insurance is a policy that protects the real estate owner from financial loss due to a challenge against his or her real estate ownership. 

The cost to defend yourself against a title claim is a grave matter—don’t do it on your own!!  A Title Insurance Policy is a minimal expense compared to the cost of defending your ownership rights in a court of law.

Stephen CollinsHow Do You Know If Your House Is Possessed?
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Title Challenges in Family Transactions

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Most property title challenges come from two situations.  Right now in the current economic climate, we get a lot of title claims in foreclosure properties.  The second major source of title challenges is from family transactions in real estate, and this type of title claim is around in all economic environments.

Whenever you interact with family, you take shortcuts because, hey, it’s family.  Maybe dad told you to do it, but then as soon as the head-of-household is gone, other family members may see things differently.  For instance, the woman accused of coercing her father into signing the deed over to her.  She took care of him, but now all the family is suspicious of her.  These things only surface when dad passes on.

Title Insurance cannot prevent the risk of all title claims; however, an Owner’s Title Insurance Policy does pay to fight or settle such claims.  Even if you are inheriting property that’s been in the family 50 years, always get a title policy on the property.

 

Stephen CollinsTitle Challenges in Family Transactions
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The Cash Condo in Miami

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A husband and wife paid cash for a condo in Miami.  They used an attorney to prepare the closing documents and closed on the property.  Thirty days later the Seller’s agent notified them that their check bounced.  What?  But it was a wire transfer?  The attorney’s check had bounced.  Fortunately Title Insurance came into play.

Title Insurances doesn’t just protect the Buyer.  In some cases, Title Insurance protects the Seller.  

Does the Buyer really own the property if the Seller never received the money?  When does title pass?  These become silly questions with Title Insurance.

Title Insurance didn’t have an obligation to the Sellers, but it made sure the Sellers got their money.  Thus there was an indirect benefit to the Seller for having Title Insurance involved.

…These aren’t all sad stories, but they are all good reasons to have Title Insurance.  This is reason #389.

 

Stephen CollinsThe Cash Condo in Miami
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Another True Story of a False Deed

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True:  A Mother and Son went to buy property from a Friend.  They made a verbal agreement to pay a certain amount of cash down, and then make regular payments for so many months to the Friend, at the end of which the property would belong to the Mother and Son.

False:  The Friend owned the property.

True:  The Statute of Frauds requires that certain transactions be in writing—real estate transactions have to be in writing in order to be enforceable.

False:  The Mother and Son got all their money back and lived happily ever after.

False.  False.  False.

After the Mother and Son had made this verbal agreement, and after they had paid on the property a while, then they learned that there were judgments against it, the taxes were delinquent, and their “Friend” was incarcerated.

True:  A gentleman’s handshake IS NOT the same as Owner’s Title Insurance on real estate.

True:  Always get Owner’s Title Insurance for every piece of real estate you own.  (Note:  If you inherited property after March 2011 that had an owner’s title policy, then you inherited the policy with it.)

True:  This story.

Unfortunately there are far too many stories of loss due to false deeds like this one.  Owner’s Title Insurance protects against what should not happen in home ownership.  This is story #591 (out of 1001 reasons) of why you should get Owner’s Title Insurance.

 

 

Stephen CollinsAnother True Story of a False Deed
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Homeowner That I Used To Know

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You can get addicted to a certain kind of sadness

When you don’t have money because you gave it all to an attorney.

You didn’t have to cut yourself off, make out like homeownership never happened.

You could have just gotten title insurance with proper endorsements.

You didn’t have to stoop so low

Because you’d have money to move to a new place if you don’t prevail in court.

You don’t want to live that way, reading into every word public records say—get title insurance with proper endorsements for financial protection against what’s unseen between the lines in courthouse documents.

Refrain!

A challenge to your home ownership can be financially catastrophic.

Don’t be a homeowner that I used to know—insure your title to your property for financial protection if somebody tells you to Walk Off The Earth.

 

Hey, if you’re not yet one of the viral viewers of “Somebody That I Used To Know” performed by Walk Off The Earth, check out this link:  http://www.youtube.com/watch?v=d9NF2edxy-M

It’s a five member band reduced to one guitar—they should have had a Title Policy so they didn’t have to sell their band equipment!

 

Stephen CollinsHomeowner That I Used To Know
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Seven Unlucky Lots in Bostwick

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Wetlands is defined by three things:  vegetation, soil, and water.  There are uplands, wetlands and middle ground, but a change in environmental regulation can leave a homeowner stranded on property rights, unable to fulfill his intent for purchasing a given piece of real estate.

There were seven lots in Bostwick—this is a true story passed along by Ryan Carter of Carter Environmental Services—each lot was approximately 250 feet from the road to the river, and each was sold for approximately $350,000 or more.  That was pre-2007.  Now they’re worth much much less…AND several of the lot owners are charged with filling the wetlands, though the current owners had purchased the lots in that condition.

It was the previous owner who had filled the lots to make them buildable and more valuable.  He created what was later deemed by the Department of Environmental Protection (DEP) “illegal uplands.”

Now in order to mitigate what the previous owner did, the new landowners could spend an additional $50,000 in mitigation fees…AND they are restricted to only using a small portion of that 250 feet.  That’s a big oops all over your bank account and your property value!

While the laws of nature don’t change, environmental regulation has left the new landowners high and dry on the wrong side of the mitigation fees.

Wetlands restriction can be very non-liberating for the landowner who buys the lot, builds the house, then owes mitigation fees and fines because of changes to the property that predate his ownership.

Seven unlucky lots in Bostwick represent seven more reasons every homeowner should have the proper Owner’s Title Endorsements when they get Title Insurance.  These seven unlucky lots don’t represent the extreme—they represent the risk that underlies ownership of any real estate.  Don’t add yourself to the list of woe, make sure your property is insured with proper Owner’s Title Endorsements and Owner’s Title Insurance.

 

Stephen CollinsSeven Unlucky Lots in Bostwick
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Environmental Protection & Financial Protection

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Sally was a smart woman.  She got title insurance and proper endorsements when she bought her real estate.  Sally had no idea at the time how smart she was.

It was the perfect property—more than an acre of land where she could have her horse, and live in the nice sized home, comfortably laid out for her and her mother.  Sally did everything right.  Like I said, she got owner’s title insurance and proper endorsements, next she did a survey and started to clear the land for her horse and put up a pole barn.  Then this nice little lady from the DEP (Department of Environmental Protection) knocked on the door.  It was not Avon calling.

“Did you know you’re impacting a wetland easement?” the DEP lady asked.  Sally had no idea…and she had no idea what kind of fines she was facing…and she had no idea how this could have happened in the first place.  Let’s take a look:

Bob had inherited the property from his father, Gary.  He had inherited it properly—after Gary’s death, the estate had gone through probate and ownership had lawfully passed to Bob as the only heir.  But Bob already had a house of his own where he and his family lived.  He was all set, he didn’t need another house, and Bob knew he had the lawful right to sell his deceased father’s house.  What Bob didn’t know was that his daddy had made a deal with the Devil—oops, err, oops—the DEP.

Yes siree, the DEP.  Bob’s father, Gary, had granted a Conservation Easement to the DEP when he built the house.  When Gary went to pull building permits for the house, he’d learned that his land had been reclassified as “wetlands.”

If your land has been designated as “wetlands,” then you can only clear without soil disturbance on the property—that means no stump pulling and no fill or draining.  If you can’t clear it with a machete or a chainsaw, you can’t clear it.

Hard not to disturb the soil when you build a house.  So Gary had made a deal with the DEP:  they would give him a postage stamp lot to build his house, his garage, his drain field—but that’s it.  The rest of his property he had to deed to them in a Conservation Easement.  Once it became a Conservation Easement, he couldn’t touch it, not even with a pocket knife.  As far as land use in a Conservation Easement, there’s no nothing but fines.

Let’s review for clarity:  Once a Conservation Easement is in place, no further clearing is permitted by hand or otherwise—the landowner cannot touch the land, not even with a pocket knife.

Gary did the deal so he could build his house on the land he’d already paid for, but the deal with the DEP was never recorded because Gary died before it could be completed.  So there was no public record of the Conservation Easement, and Bob didn’t know about it so he couldn’t disclose it with he’d sold the property to Sally.  When she got title insurance, the title search didn’t reveal it because it wasn’t in public records.  Gary had done the deal with the DEP, built his house, but passed away before he could get the Conservation Easement recorded.  And by no fault of her own, or the title company’s, that’s how Sally wound up with the whole entire mess.

Any resemblance of these characters to actual people is more than coincidental.  This is a true story.  The names have been changed to respect the privacy of those involved in a very public matter:  landowner rights.

The only good side to this story is that Sally had gotten title insurance with proper endorsements.  Despite the fact that she may have to leave the property that was perfect for her, and find a new place for herself and her mom and where she could keep her horse, Sally will not have to pay the cost to resolve this issue.  By no fault or negligence of her own, the title company, or the seller, the land use restrictions had been violated.

Title claims are not something you hear about all the time (unless of course you’re me), but title insurance with proper endorsements is vital to personal financial protection if you do have a challenge to your ownership.  Conservation Easements can be one of those challenges, especially if not recorded correctly.

Conservation Easements are pretty restrictive on their own, but they can be economically crippling if you don’t know about them.  Just when you think you own your property, Bambi, Thumper, or Flower could claim it because they were given a Conservation Easement!

Guard against undisclosed Conservation Easements and all other flaws in public records by securing your ownership interest with owner’s title insurance with proper endorsements.  

P.S. Beware of Bambi!

 

Stephen CollinsEnvironmental Protection & Financial Protection
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Real Value of Owner’s Title Insurance in Florida

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The misconception of Title Insurance is costing Florida homeowners dearly.  I would like to clarify the real value of Owner’s Title Insurance for all those impacted by the Florida real estate market, from the individual homeowner to the State economy.

When an Owner’s Title Insurance is purchased, primarily it is for the prevention of claims against home ownership.  When a company provides title insurance, a title search is part of the risk assessment done before issuing a policy.  The title insurance company’s objective is in lockstep with the consumer’s best interest:  to avoid questions or challenges of the homeowner’s title.  Thus in the examination of public records, the title company has a vested concern to find any and all complications to the ownership title.  We just do not say, as quoted in a famous movie, “This house is clean.”*   You saw how well that went—they should have gotten a policy as their house is being sucked into oblivion!  We put our money where our mouth is and insure it.

Though title insurance works mostly through prevention, it offers security via financial protection from the massive costs of litigation and other legal expenses should a problem, challenge, or complication to a Florida homeowner’s title arise.  No matter how much effort is put into this prevention, bad things still happen.  It’s expensive to be right when someone thinks you’re wrong.  Owner’s Title Insurance provides and pays for all costs associated with a title claim (whether through settlement, legal defense, and / or reimbursement of the policy amount to the homeowner if that defense does not prevail).

The cost of Owner’s Title Insurance is promulgated by the State of Florida, and the current rate has been the same for 20 years.  It is a nominal fee when compared to what litigation costs are.  Furthermore, Owner’s Title insurance is a one-time fee, typically paid at the closing of a real estate transaction.  Once it’s paid, it’s paid—no monthly premiums, no annual fees—no additional charge to the consumer, the homeowner.

With Owner’s Title Insurance, consumers pay a set amount for financial protection against the unknown cost of hidden risk to home ownership. 

Please refer to the numerous posts in my blog for examples of hidden risk to home ownership.  These issues are real and can be devastating to those who are not insured.

Homeowners need Owner’s Title Insurance now more than ever.  Title Insurance plays a vital role in Florida’s recovering housing market.  As a source of financial protection, Owner’s Title Insurance assures potential Florida buyers they can invest in real estate with stable value backing that investment.

Owner’s Title Insurance is good home economics.  It nurtures financial security for the homeowner, the State budget, and the Florida economy.  Owner’s Title Insurance adds real value to real estate rights, thus it benefits every Florida citizen.

*Poltergeist

 

Stephen CollinsReal Value of Owner’s Title Insurance in Florida
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