Is Your Real Estate Transaction Extra Risky?
In today’s competitive real estate market Title Insurance Companies and their underwriters are having to deal with situations that may prove to be more risky to take on. Some of these might include the following:
- Insuring over violation of building restrictions by a building to be constructed;
- Insuring over mechanic’s liens in reliance on indemnity letters, affidavits, credit worthiness of the owner, builder, or other person;
- Insuring title to land formerly covered by navigable water;
- Insuring tidelands or submerged lands;
- Insuring title based on adverse possession where no court has ruled;
- Insuring title through: (a) tax deed; (b) sheriff’s or Federal Marshal’s deed under an execution sale; (d) sale by the IRS for unpaid federal taxes; and, (e) other similar sales not confirmed by a court of record having jurisdiction over the parties;
- Transactions involving municipal corporations or other governmental bodies;
- Insuring transactions involving Indian / Native American lands;
- Insuring a mineral estate separate and apart from the surface interest or providing mineral coverage on commercial property in area of mineral development;
- Insuring water rights;
- Insuring against known existing liens or other interests, such as adverse ownership, or litigation involving the title;
- Insuring title to beaches or recreational areas;
- Insuring title to railroad property;
- Insuring transfers by a corporation to one of its officers or by a partnership to one of its partners;
- Insuring transfers with leasebacks to the grantor; (possible mortgage foreclosure rescue scam)
- Insuring title to land subject to Federal Estate Tax or state inheritance tax on a current or former deceased owner;
You should also consider some of the following questions and whether they pertain to your transaction:
- Is access to your subject property based solely upon an easement?
- Does your owner have title based upon judicial proceedings (e.g., tax foreclosure, condemnation, bankruptcy) or a foreclosure or deed in lieu of foreclosure?
- Is it necessary to rely upon an indemnity in order to make the transaction happen?
- Are there any survey concerns (e.g., does the survey show any significant conflict or encroachment)?
- Is the current owner no longer in possession of the property?
Each and every one of the items above has the potential to expose you or your client to extra risk. Make sure you ask the appropriate questions and verify that you are obtaining the proper title insurance coverage. Particular care must be taken, appropriate research conducted and necessary permissions granted to the title company to proceed. Even if it delays your deal a little longer, it’s worth making certain that your client or their lender are ultimately protected should a question arise down the road.
Other Posts Of Relevance:
Title insurance on no consideration deeds
Mechanics Lien Refresher
About World Wide Land Transfer:
World Wide Land Transfer is a full service Settlement and Escrow Company also providing comprehensive title insurance services for all forms of real estate transactions ranging from a home purchase or refinance to the most complex commercial transaction. World Wide Land Transfer started predominantly as a PA Title Company in 2004 but grew quickly and started issuing NJ Title Insurance, NY Title Insurance, MD Title Insurance, VA Title Insurance and FL Title Insurance. World Wide now covers most counties throughout the nation.