Tag: policy

Title Insurance 101 – Refresher Course

Most of you have probably been in the real estate world long enough to know what title insurance is. However, we thought it would be helpful to provide a “refresher” course to help answer your client’s questions.

Let’s face it, most people closing on real estate don’t read through the details of all of their closing documents. However, there are people who look at the settlement statement and want to know what they are paying for. Also, suppose you have clients who are keeping a close eye on finances. If they want to save some money, they might ask if title insurance is necessary. Here are some pointers to help out your clients, or those professionals who are still new to the real estate world.

“Title Insurance protects property rights.”

This is the simplest definition of title insurance. A title insurance policy insures that the property owner actually has full title to the real estate. When a real estate legal description or address is brought to us, we start an extensive search. Our search follows the “chain of title”, the deeds that show how the real estate changed hands over the years. Any mortgages filed against that real estate must have been properly released. Not only do we look at the records for that tract of real estate, but we also look for judgments against the buyers and sellers. We look for any law suits or claims that could potentially attach to the real estate as liens.

Title Insurance brings peace of mind.

The title commitment is our promise to issue a title insurance policy once the requirements have been met. The title insurance policy is issued after closing, once the deed and mortgage have been filed, and the liens properly released. Once the new property owners receive their policy, they can be assured that they truly own their real estate. If a claim is made by someone challenging their ownership, they have the policy to back them up.

Here at Tallgrass Title we work hard to provide the information and assistance everyone needs for a smooth closing. Feel free to contact one of our agents today to help get your real estate questions answered.

Selling or Purchasing Property with a Trust

When buying or selling real estate involving a trust, many questions can arise. Who signs the documents on behalf of a trust?  What is needed to prove that a particular seller has the authority to sell property?  Are there additional documents that require filing with the County Register of Deeds in order to transfer real estate to and from a trust?  The purpose of this post is to help people involved in a real estate transaction to become more comfortable with these issues.

A trust is simply a contract between the creator of the trust and a person that promises to carry out the wishes of the creator.  The creator of the trust and the trusted person, “trustee”, are often the same person.  I know, it’s weird, but that is the basic arrangement.  So, basically, in a real estate transaction involving a trust, land is deeded to the trustee to hold at the direction of the written contract or “trust agreement.”  Oftentimes, people will state that property is “in a trust” or “held by a trust.”

When deeding property to a trustee, it is important for the buyer to understand how to properly title the deed.  Most often, it will read something like “John Smith, Trustee of the John Smith Revocable Living Trust date 1-1-2018.”  If you are buying real estate to be titled in the name of a trustee, you will need to provide this information to the title company.   If you are uncertain, please contact your attorney that prepared your trust document or provide a copy to the title company.  Often, the document will indicate how real estate is to be titled.

When selling real estate owned by a trust, the trust agreement must specifically give the authority of the trustee to sell or “alienate” real estate.  The title company handling the transaction will require to see this portion of the trust document or have the trustee complete a “certificate of trust” document that states that the trust grants them the authority to sell property.

Lastly, if the original trustee has passed away or resigned as trustee, the role of the trustee passes to a “successor trustee.”  Again, in order to prove that a successor trustee has authority to act on behalf of a trust, the trust agreement or some documentation of the transfer of authority will be required.

As real estate transactions involving trusts may require additional information, it is important to timely provide documentation as required by your title company.  Additionally, here at Tallgrass Title, our closing agents and title examiners are knowledgeable in how to handle transactions involving trusts.  If you have questions, feel free to contact our office.

Tallgrass Title Going Paperless

With the continuous technology development going on right now, advisors in the title industry have been encouraging title companies to go paperless. Going paperless is not a new idea for us. We have been talking and planning for this for some time. We have already started uploading certain search and closing documents for new files. When someone sends or gives us a document, we scan it and publish it as soon as possible. However, we intend to officially go paperless in the next couple of weeks.

What This Means for You:

Our search documents will be uploaded to Paperless Closer. This is the program we use to securely store documents with a portal that you can access. Access the portal through our website using the “Client Login” button at the top of the page. We already upload the contract, receipts, closing statements, and invoices during the closing process, but you will be able to view even more information. You will be able to see the deeds, restrictive covenants, plats, etc. that we researched during the search process. This should make it easier, especially for realtors, to see which documents have already been given to us, as well as help you collect the documents you need to keep for your records.

A tip for cutting down on paper: we only need originals of notarized documents back in our office for closing. In the deed packet, a seller may sign all of the non-notarized documents electronically. Just be sure to send us a copy od the completed documents and we will add them to paperless closer. As a reminder, please do not send documents with personal information through email without making sure it is protected. Scammers and hackers are becoming more and more common, and none of us want to see our clients’ identities stolen!

If you (or an auditor) are going through your files and notice a missing document, look for it on paperless closer. For older files, if you don’t see it, just send us an email or quick call and we can publish it immediately. You won’t have long to wait since it is a very quick and easy process for us to pull something from our electronic archives.

Not familiar with Paperless Closer?

For those who are not as familiar with Paperless Closer, just let us know and we can get you some training. It only takes minutes to create a new account if you don’t have one. And, it is a simple, user-friendly program that won’t take up much of your time.

As always, please call or email if you have any questions or need any assistance with Paperless Closer. We are happy to answer any questions you may have!

Understanding the Title Commitment – Part 2

Towards the end of the Title Insurance Commitment, you will find a list of “Exceptions from Coverage”. This list appears in Schedule B – Section II. The Standard Exceptions are general and appear on every commitment. However, many of the Additional Exceptions are specific to your tract of real estate. Here are some common types of documents that show as Additional Exceptions:

  1. Plat

A plat is a picture of a subdivision. It is basically a drawing that shows the shape of the lots, and where the roads are. Many also show utility lines and easements originally planned by the developers.

  1. Restrictive Covenants

Restrictive Covenants list any restrictions on lots located in a subdivision. The purpose of these is to ensure that the owner of each lot can enjoy his real estate without causing annoyance to his neighbors. Many of these documents also contain rules concerning the upkeep and appearance of the subdivision. For example, these may include specific guidelines on what materials or color(s) are used for your house. They may also contain rules about fences, additional structures, or vehicle parking. These documents may include information about setting up a Homeowner’s Association (or HOA).

  1. Oil & Gas Leases

In certain parts of Kansas there is active exploration and production of oil, natural gas, and other natural resources. In the past, there were many oil and gas leases given, but a good number of them did not result in any actual activity. Additionally, many of them were for a certain number of years and the terms have already expired. Most of the leases we see on property searches today can be dropped off from the policy by a simple affidavit signed during closing. For more information on oil and gas leases, click here to view a blog we posted earlier this year.

  1. Ordinances

An ordinance is a public declaration made by the city. These may have some effect on your real estate, depending on what type of ordinance it is. For example, the document may provide for the installation of water lines or sidewalks.

  1. Easements

Easements give other persons the right to use your real estate for a specific purpose. A very common easement is an “ingress/egress easement”. This allows someone to travel across your real estate usually to access real estate they own adjacent to yours. Another very common easement is a utility easement. These agreements allow electric, natural gas, or other specified companies to construct or maintain utility lines. Most easements contain language saying that the easement will “run with the land”. This means that when you sell your property, the new owners will have to honor the easement. As mentioned above, an easement is for a particular purpose. As the owner of the real estate, you do have the right to make sure that the person using the easement isn’t trespassing on or causing damage to another part of your real estate.

As you review your title insurance commitment, please remember that you can ask for copies of the documents that are listed. At Tallgrass Title we are happy to answer any questions to help make your transaction as smooth as possible.

Understanding Your Policy

Following the closing of your transaction, you will receive a “title insurance policy.” This document looks a lot like the “commitment” you received prior to closing your transaction. As you remember from the previous post, the commitment legally binds the title company to issue a title insurance policy if the requirements of the commitment are met. Now that the transaction is complete, and the requirements of the commitment are met, as a buyer, you will receive an “owners title insurance policy.”
Like the commitment, the first few pages of your title policy will include a policy jacket full of standard information and a privacy policy that is not transaction specific. I have omitted these pages from this post to focus our attention on the information about your real estate. The diagram below points out the highlights of your title policy.
Once you receive a title policy, put it in a safe place. It is what insures the fact that you own your real estate.
Again, here at Tallgrass Title, we love to answer questions about title insurance. Feel free to call or email anytime. That’s what we do!