nuts and bolts of title insurance · 2017. 3. 20. · nuts and bolts of title insurance title...

NUTS AND BOLTS OF TITLE INSURANCE



Marc Israel, Esq. [email protected]


What Does Title Insurance “Insure”?

That Title is Vested in Named Insured

•  Should Be an Unbroken Chain of Title •  Breaks in Title are Insured by Title Policy •  Mistakes, Errors, Fraud •  Monetary Claim on Policy, Not Restoration to Possession



That Title is Free of Liens and Encumbrances

•  Encumbrances to the Title to the Property •  Goal is to Transfer “Free and Clear” •  Mortgages, Judgments, Other Liens •  Mistakes, Errors, Fraud



That Insured Has Full Use and Access to Property

•  Surveys •  Encroachments •  Possible “Out of Possession” •  Adverse Possession •  Boundary Line Agreement


Types of Title Policies

•  Owner’s (Fee) Policy •  Lender’s (Mortgage) Policy •  Lender’s Policy Provides Coverage for Priority Position and Ability to Foreclose


Title Ordering and Rates

•  Usually Ordered When the Contract is Signed •  Order Early—Survey Issues •  Rates Regulated by New York State •  No Discounts Other Than Statutory Discounts


Statutory Discounts

•  Simultaneous Fee/Mortgage Rate (Simul Rate) •  Condominium Bulk Rate Discount •  Right of Condo Purchaser to Use Title Company of Choice •  Reissue Rate


Coop Apartments

•  Not Real Property—Stock and Lease •  Judgment and Lien Search •  Limited Search and Limited Liability •  Coop “Title” Insurance (Leasehold Insurance)


The Title Search—County Recording Office

•  Looking for Unbroken Chain of Title •  Deed •  Mortgages •  Easements •  Covenants and Restrictions


The Title Search—County Clerk’s Office •  Judgments •  Lis Pendens •  Mechanics Liens •  ECB Violations •  Parking Violations Bureau Liens


The Title Search—Municipal Searches

•  Tax Search •  Certificate of Occupancy •  Department of Buildings •  Fire Department •  HPD/Emergency Repairs


Schedule A •  Metes and Bounds (Legal) Description •  Must Match Previous Deed •  Must Be Consistent with Survey


Schedule B

•  Exceptions to Title Insurance •  Most Important Part of the Title Report •  Exceptions Must Be Cleared or Omitted •  Purchaser Can Take Title “Subject To” Exceptions


Clearing Schedule B Title Exceptions—Mortgages

•  Satisfaction of Mortgage and Payoff Letter •  Private Mortgages •  Prior Title Company Clearance •  Ancient Mortgages


Clearing Schedule B Title Exceptions—Liens, Taxes, and Deed Issues

•  Breaks in Title •  Surrogates Court Matters •  Judgments and Liens •  Escrowing for Schedule B Exceptions •  Attorney Undertakings


The Title Company’s Role at Closing—Reviewing Documents to be Recorded

•  Review All Documents •  Spelling and Consistency of Names •  Accuracy of Deed and Mortgage •  Schedule A


The Title Company’s Role at Closing—Collecting Monies

•  Collect Payoff of Mortgages, Liens, Judgments •  Collect all Taxes •  Collect Title Fees and Premium


The Title Company’s Role at Closing—Marking Up Report and Collecting

Documents •  Collect Schedule B and Other Clearance Documents •  Marking Up Report •  “Insure”, “Except”, “Omit” “For Information Only”