The Slovak Spectator ran an interesting story about the fight for a bottling plant, and the land it sits on. Here it is in brief: Company A was annulled, a town outside Trenčín claimed it should be made owner, a claim the local land registry eventually recognized. The town sold the land to Company B, which built a bottling factory on it. Company A’s owner then managed to have his firm reinstated in the business registry and successfully fought in court to regain ownership of the land, and the factory that was on it.

The moral of the story, which you can read in full here, is that just because you bought land from a city doesn’t mean you couldn’t still lose everything (including your investment) thanks to a title challenge. CIJ Blog asked a quartet of experts in the field for a quick reaction / analysis of the story.

Robert Danis (Wilson & Partners)

In the absence of details we are not able to comment on the arguments and facts discussed in the article. However, as in other countries of the CEE region the lists of titles in Slovakia do not provide conclusive proof of a good title to the property, and we have seen similar cases where title transfers have not been properly done in the past and have later been declared void later on.

We usually check acquisition titles of the previous owners over the last 10 years  in order to ascertain whether the current owner can claim acquisition of asset by adverse possession should there be some defect in acquisition titles in more remote history of the property. The investor could have of course also sought title insurance in order to shift its title risks to insurance company and recover part of its losses more efficiently, which has probably not the case.’

Olga Humlova (Salans)

Without knowing the facts of the discussed case, it is true that both in the Czech and Slovak Republics the legal system does not provide protection for persons who are registered as the owner in the cadastral register. The registration of title has to be changed if the factual situation differs from the registration and if someone can prove that the registration is not correct.

That is why it is of utmost importance to pay attention to proper due diligence on the real estate title history during the last ten years, at least. An owner who acquired real estate in good faith and holds it in good faith that he is the owner can acquire the ownership title through prescription. The ten-year period includes the holding, in good faith, of legal predecessors to the current owner. The burden of proof that the current registered owner is not the real owner lies with the person claiming the ownership title.

As to the costs for investment, the original/new owner has to reimburse the last/registered owner for such costs as it would represent unjustified enrichment on his side.

Zdenek Valka (Stewart Title)

This case is not a surprise for us as title insurer and should be not a surprise for any lawyer either. Ownership rights are unlimitedly protected according to Slovak Civil Code (the same applies for Czech Republic too) and from our experience we are aware of few cases when legal successors of a historical owner won a case in front of Slovak court 60 years after expropriation took place. We believe that title insurance which covers risks on title that can not be discovered despite any thorough due diligence can be the solution.

Andrew Jackson (First Title)

This case further highlights the issue with the Land Registry systems in most CEE countries – they do not provide a state guarantee of title and hence conclusive proof of ownership to land and buildings. This leaves the Title open to a third party challenge, which we have often seen can arise from the invalidity of a historical transaction. Such historical transactions may not be easily discoverable from traditional due diligence. If the land and buildings had been protected by a title insurance policy, which is often available for a relatively low one-off premium, then the considerable costs of defending the title would have been passed from the owner’s balance sheet to the Title Insurer with the added peace of mind that if the defence proves unsuccessful the title insurer will compensate the insured for their losses. It makes sense to guarantee asset certainty and liquidity by buying a title insurance policy as part of your risk management strategy.

(we welcome other comments by email, or in the comments section)

Everything in real estate is negotiable and that includes title insurance and escrow services.

Title insurance companies are hired, in part, to issue title insurance protection for home buyers and lenders. Lenders require the service to protect them against loss resulting from claims by others against your new home. The insurance comes into play during the “closing” period of real estate transactions and is usually packed with escrow services.

Escrow services provide a neutral third party, through which is funneled the paperwork, money, transaction instructions and other details of a home purchase or mortgage refinance.

Here are some tips to get the best title and escrow services for the best price.

• Educate yourself. The title industry’s American Land Title Association, its state affiliates, the American Escrow Association and your state’s regulatory offices for title and escrow services, all provide consumer information. For more independent insight, consider Sandy Gadow’s mother-of -all-title-and-escrow-books “The Complete Guide To Your Real Estate Closing” (McGraw Hill $19.95). Gadow also offers a partner Web site EscrowHelp.com.

• Before hiring title or escrow services, obtain several referrals from those you trust, family, friends, co-workers, real estate agents and others who’ve recently closed a satisfactory escrow.

• Ask for a referral to the title or escrow officer, not the company. The officer should be familiar with the type of home you are selling, especially if it’s a condo or other multiplex home, an older historic home or other special house. The officer should be conveniently located. Saving time saves money. Consider a professional who is patient, exacting and willing to give you the time and information you need to understand escrow.

• Compare the costs of different escrow and title companies before agreeing to use one. Fees can and do vary widely. Ask for EACH AND EVERY escrow cost from title insurance and search and escrow service fees to all the little, so-called “garbage fees” that crop up in escrow.

• Be aware of discounts. Refinance-related discounts may be available when the loan being refinanced is relatively new, or only a few years old. Likewise, if you stick with the same lender and title and escrow service, discounts may be available.

• Be sure when you complete an application for a loan you get settlement costs and good faith estimate information. Federal law requires the lender or mortgage broker deliver these documents to you within three days of receiving the application. Costs on the good faith estimate and final settlement sheet are not only title insurance and escrow related fees, but a host of other costs for the mortgage, insurance and taxes among others.

• Remember, the good faith estimate is only an estimate. For example, the lender may not know the costs for a escrow agent or title company that you use, or the exact amount that will be collected for title insurance and other costs not levied by the lender.

• To avoid surprises, let the lender and settlement agent (escrow or title company) know that you will want to see the settlement statement one day in advance and that you won’t be rushed on closing day. Under new federal regulations you can also get a final truth-in-lending disclosure three days before closing.

• Compare the good faith estimate with the settlement statement and, if necessary, contact the lender as well as the title/escrow company, to demand that they explain any differences. Ask the lender, title or escrow companies to waive any fees that were not listed in the good-faith estimate and they can’t explain to your satisfaction. Get an acceptable explanation why it wasn’t on the original statement.

• On closing day, come prepared with plenty of time, pencil, paper, a calculator, and an inquisitive, demanding mind. You are allowed to have your representative — a real estate agent, mortgage counselor or other professional — attend closing with you. A real estate agent is involved in the deal should accompany you.

Sources: Broderick Perkins writer for Realty Times and getty Images

The twister swept across a 15-mile area, including the suburbs of Whitchurch, and came near to causing widespread property damage. The States environment agency has said that, “climate prophecies also indicate that Britain will be windier. What is title insurance and why should any buyer get it when getting a home ( single family, townhouse, apartment, studio, or whatever format your house purchase takes ) ? Doesn’t the solicitor or settlement company handling the closing see to it that you’ve a clear title? Isn’t this yet another way for somebody to siphon some coins off an estate transaction? Each mortgage bank I am conscious of needs title insurance be bought to cover the quantity of the mortgage. On rare occasions mistakes are made anyhow.

Sometimes these events are recorded in different places. A report by the insurer Axa warned that less than half of little firms don’t have a plan in place to make sure that their business could survive should they be hit by an emergency or disaster.

Wherever you get your insurance, if it is from a direct insurer like Norwich Union, brokers like Endsleigh, or thru comparison sites like Moneynet ( home renters insurance ), it’s critically necessary to check all of your coverage details.
Tenant insurance

Title Insurance = Peace of Mind

Purchasing a home is probably the single biggest investment you will ever make. Before closing on the house, you’ll want to know that no other individual or entity has a right, lien or claim to the property.

Determining that your rights and interests to the property are clear is the business of a title insurance company.

For a modest, one-time title insurance premium, you will receive continuous title insurance protection in an amount equal to the purchase price of the property or its current market value. This premium typically includes your “owners” policy as well as the “lenders” policy.

One of the marked advantages of title insurance is that prior to a policy being issued, the title insurance company completes extensive research into relevant public records, maps and documents to trace ownership of the property and determine if anyone other than you has an interest in the property. Through its research, the title insurance company can usually identify any title problems that may arise and have these problems cleared-up prior to closing.

Your title insurance owner’s policy will describe the property and outline any recorded limitations on your ownership. It will also set forth the title insurance company’s responsibilities should any claim covered by the policy terms arise. Typically your title insurance will protect you from loss:

if someone contests your title in legal action (the title insurance company will defend the title at no expense to you),

or if there is a title defect that cannot be eliminated (the title insurance company will protect you from financial loss – up to the amount of the policy).

Copyright © 2009 Front Street Mortgage Consultants
Portions Copyright © 2009 a la mode, inc.

Posted in Real Estate Tagged: buying real estate

What is Real Estate Escrow? by BillM

Escrow is a deposit, most typically of funds and/or documents, that is held until paid out upon successful completion of the terms of the escrow instructions. Technically defined, Escrow is a legal arrangement in which a neutral third party holds an asset during the period in which the conditions of the deal is being finalized by the other two parties. In actuality it can be money, property, or really any asset of (perceived) value. It can be used to transfer, or protect, personal and business property. While the property may be business assets, or intellectual property such as software source code, escrow is most commonly associated with real estate transactions.

In real estate, escrow provides a form of mediation between all the participants in the transaction; buyers, sellers, lenders, agents, and title company. The escrow is a holding place for all funds, instructions, and documents necessary for the purchase of the home, including the buyers funds for the down payment, the lender”s funds and documents for the new loan, and the sellers deed. When a buyer makes an offer on a property and the seller accepts the offer the buyer is expected to demonstrate the good faith of the offer with a cash deposit, also known as earnest money. In the event the conditions of the sale are met but the buyer decides not to go through with the deal, the cash deposit is typically given by the escrow agent to the seller as compensation for having taken the property off the market in anticipation of the purchase being completed. It is important that the escrow agreement carefully defines what does or does not constitute a release event and that it provides a process for providing notice of any events to the parties, the correct process for any response or objection to such notices, and the dispute resolution procedures.

Typically, an escrow begins with the Realtor delivering the purchase contract and the buyer”s earnest money deposit to the escrow company. The escrow company will prepare and deliver the initial escrow instructions and other related documentation. Once the purchase agreement has been executed, the purchase deposit made and an escrow account has been opened the buyer typically applies for a mortgage loan. Once the loan has been approved, the lender provides instructions detailing the conditions under which the funds can be disbursed. Bear in mind that the buyer must have the necessary insurance in place before most lenders will send the closing funds to the title company. Additionally, the lender may require that an escrow account to pay property tax and insurance during the term of the mortgage be established.

Closing costs associated with the transaction vary depending on the sales contract and may include items such as loan payoffs, inspections, any judgments or liens, recording fees, tax pro-rations, transfer taxes, notary fees and any other negotiated items. Real Estate commissions are traditionally paid at the close of escrow from the Seller’s proceeds. Another item settled during this transaction is title insurance, which insures the ownership of real property against any encumbrances to the title. If a buyer does not elect to buy title insurance, they are not protected, even if the prior owner had title insurance.

Once the new title has been recorded, the escrow agent prepares and delivers closing statements to both the buyer and seller. These statements should be reviewed in detail to ensure they are correct, and any inconsistencies within should be resolved before proceeding. Prior to closing, the buyer and the buyer’s agent do a final walk-through of the home to verify that contract terms are met.

When the terms of the purchase agreement are met, the escrow agent assigns the property title to the buyer and distributes the funds to the seller, records the deed, closes the escrow. An escrow account will provide the participants in the transaction with a guarantee that no funds or property will change hands until all of the terms and conditions have been followed to both parties satisfaction. The rules and procedures around escrow and closing can vary by region, title company, and lender. Therefore it is often advisable to engage an attorney familiar with the process. Ultimately, the use of escrow is intended to provide security and peace of mind for buyer, seller, lender and Realtor alike.

Bill leverages his 18 years of experience in the financial services industry to write informative articles for the non-industry reader. His site can be found at www.hotmortgagedeal.com

Article Source: http://www.articlesnatch.com/

Title to a property is a record detailing the owners of the property and rights associated with the ownership. Title typically shows a progression of ownership from the first owner to the current one. Title is a fairly simple concept, but when it goes wrong it is a nightmare. That is where title insurance comes in.

Title Insurance

Title insurance guarantees that the title on a property is marketable when you purchase the home, condo, land, etc. You should always pay for title insurance. It typically costs a few hundred dollars and will save you a bundle if problems arise.

When you buy title insurance, a title insurance company researches the title for the property. The insurance company will look to see if the title is clear. “Clear” simply means that the seller is truly transferring title to you and no other person can claim ownership. While this sounds fairly simple, rest assured that title problems arise all of the time.

Title Problems

You might be wondering how you could possibly have title problems. Here are a few examples:

1. Divorcing Couples – Divorce is unpleasant and sometime very ugly. In particularly nasty situations, one spouse may attempt to sell a home without telling the other. To gain clear title, you need both spouses to sign off on the sale. If you don’t, you are going to become a party of the divorce proceedings. Now, wouldn’t that be fun?

2. Estate Sales – If you are purchasing a house as part of an estate sale, there can be real problems. The heirs may not be getting along and in an effort to “get what’s mine”, may try to sell the residence without including all the heirs in the transaction. If you buy this home, you could end up involved in a lawsuit filed by an heir left out of the transaction.

3. Ingress and Egress Issues – Title to a property can have technical issues related to egress and ingress. Occasionally, one finds title to a property that is so messed up that the owner doesn’t have the right to enter or leave the land because to do so would require crossing another person’s property. In short, the property is landlocked and something must be worked out with the neighbors. Typically, a solution comes in the form of hard, cold cash…lots of it.

These are just a few issues that can arise with title. With real estate, unique issues can arise all the time.

If you buy title insurance, you don’t have to worry about problems with title. If a problem arises, you calmly pick up the phone and call the title insurance company. The insurance company will come up with a solution, even if it means paying you for bad title.

When you purchase a home,  you also purchase title insurance, but what is it?

Title insurance is simply this, protection against loss arising from problems connected to the title to your property.  When you buy a home, you receive a title to the property, meaning you are not the full legal owner of that property.  You can purchase it for a one-time premium, paid in most cases at closing.

Title insurance usually covers four types of “hidden” risks: errors, liens, ownership claims, and invalid deeds. If a claim is made against your property, the title insurance company will negotiate with the other party to settle the claim, defend you in court if necessary, pay any incurred legal costs, and satisfy any covered claims. Having title insurance can save you time, money, and even your home.

Posted via email from Title Insurance
Continuing Ed for Title Agents
<a href=”http://www.learntitle.co

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Where Does Your Dollar Go??!!  

Title Insurance: As a homebuyer, the term is probably familiar – but is it understood? What is your dollar actually paying for when you purchase a title policy?? 

Title insurers, unlike property or casualty insurance companies, operate under the theory of risk elimination. Title companies spend a high percentage of their operating income each year collecting, storing, maintaining and analyzing official records for information that affects title to real property. Their technical experts are trained to identify the rights others may have in your property, such as recorded liens, legal actions, disputed interests, rights of way or other encumbrances on your title. Before closing your transaction, the title company will proceed to “clear” those encumbrances which you do not wish to assume. 

This theory is different from that of most other insurance where, for example, rates and anticipated losses are based on actuarial studies and premiums are pooled on the assumption that a certain number of claims will be made. The distinction is important: title insurance premiums are paid to identify and eliminate potential risks and claims before they happen. Medical and casualty insurance premiums, for example, are paid when you close the real estate transaction, while property, casualty and medical insurance require regular renewal premiums. 

The goal of title companies is to conduct such thorough search and evaluation of public records that no claims will ever arise. Of course, this is impossible – we live in an imperfect world, where human error and changing legal interpretations make 100 percent risk elimination impossible. When claims arise, professional claims personnel are assigned to handle them according to the terms of the title insurance policy. 

The issuance of a title insurance policy is highly labor-intensive. It is based upon the maintenance of a title “plat,” or library of title records, in many cases dating back over a hundred years. Each day, recorded documents affecting real property and property owners are posted to these title plants so that when a title search on a particular parcel is requested, the information is already organized for rapid and accurate retrieval. In California, most of the large counties have been converted to computer-based title plant systems which provide retrieval from remote locations, further speeding the process of delivering the title search to the customer. The investment is skilled personnel and advanced data processing represents a major part of the title insurance premium dollar. 

Proper title plan maintenance, research, evaluation, and legal interpretations are the foundations upon which a title policy rests. That is where most of your dollar goes, and that is the source of your protection and peace of mind as a homeowner in California.   

Material discussed is meant for general illustration and/or informational purposes only and is not to be construed as tax, legal or investment advice. Although the information has been gathered from sources believed to be reliable, please note that individual situations can vary, therefore, please consult a professional for specific advice.

S10-31 [S3-02 (07/01)]

Posted in California