Tag: Riley

Water, Water and Water (Part I – Drinking Water)

Leonardo Da Vinci is quoted as famously saying “Water is the driving force in nature.” The modern world of real estate is no exception.  Real estate use will most always require that there is some access to water.  Whether the property be a residential home or a cow pasture, the need for water is present.  Part I of this post will focus where you obtain your tap and drinking water.

In residential real estate, there are three main sources of drinking water in this region of the country: Municipally supplied water utility, Rural Water District or owner owned and maintained well.

Municipally supplied water is just that. The City supplies water to its residents and charges a fee for the service.  This is how a majority of homes are supplied with drinking water.  However, where does the City obtain the water supplied?  Typically, a City will own and maintain wells or obtain water from a reservoir or river and treat and supply the water.   The water is then provided to residents through a City owned water system.  Often, the water obtained from wells is pure enough that the City will not be required to treat the water.  Reservoirs or rivers almost always require some form of treatment to the water before providing it to residents.  Furthermore, to ensure the safety of the water supplied, the State of Kansas and the Federal government require periodic testing of public drinking water.

Rural Water Districts are “member-owned” cooperatives that are most often established to provide water to areas not served by a City. The “members” are basically the individuals that purchase water from the water district.  The members maintain a board that oversees the water system and its sources of water.  Water districts are also required to periodically test its water to maintain that it is pure and uncontaminated.  In order to purchase water from a water district, one must first become a “member.”  This usually involves a small transfer fee from the previous owner of the real estate.   If you are establishing a new residence or other new water service, the fee requirement can be substantial.  It is important to investigate this issue when planning a home building project.

The final, most common source of water is the private well. The owner has a water well that pumps water and provides it to the residence or farm.  In Kansas, water windmills were once a part of most farm yards.  Today, the work is done by electric pumps and pressure tanks in order to provide constant, consistent water to the owner.  Owning your water source may sound liberating, but a private well comes with its own headaches.  The owner of the well is wholly responsible for checking the quality of the water.  Additionally, wells can go dry; especially in drought years.  Lastly, the equipment required to pump and pressurize and possibly treat the water requires maintenance.  It is important in a real estate transaction to investigate these issues prior to closing.

When purchasing or selling real estate, it is important to understand how water is obtained at the real estate. This will prevent unwanted surprises down the road.

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!

What is the Difference Between a “Warranty Deed, Quit Claim Deed, Corporate Deed, etc.?”

In your contract for the sale or purchase of real estate, you may have seen language that says that the real estate shall be passed by a “good and valid general warranty deed.” What is a warranty deed?  Along those same lines: what is a quit claim deed? Corporate warranty deed? Executor’s deed? Sheriff’s deed?  Which deed do you need for your real estate transaction?

To start, a deed is the document that transfers ownership of real estate from one person or entity to another. Often when folks think of a deed, they get a mental image of a large, cartoonish scroll of paper with ornate writing and metallic stamps.  In reality, a deed is simply piece of printer paper that contains language of conveyance.  This begs the question: well, what prevents anybody from simply making a deed to real estate regardless of whether they own it?  Title insurance! But that is for another post (Understanding your Title Commitment and Policy).

General Warranty Deed

A “general” warranty deed in Kansas is just that; a standard, plain, warranty deed. The “warranty” portion of the deed is stating that the grantor (seller) of the real estate is “warranting” or “defending” the fact that the grantor actually owns the real estate. They are also guaranteeing that they are passing title to the real estate.  A warranty deed is guaranteeing that no other person owns the interest in the real estate being transferred.  It works like a warranty on a new car that guarantees the car will perform as promised for a period of time. Additional language regarding the extent of the warranty being given is included in the deed.

Deeds from Businesses or Estates

When the words “corporate”, “executor” or “conservator” appear in the title of a warranty deed, it is basically to identify the entity or authority of the grantor (seller) to transfer the real estate in the transaction. Additional language about the entity or individual transferring title is accompanied in the deed.  However, at the end of the day, the title being conveyed by one of these deeds is the same as a general warranty deed.

Sheriff’s Deed

A “sheriff’s deed” is a deed that results from the county sheriff passing title to real estate. This is typical through a foreclosure sale or tax sale.  This type of deed can be quite complicated and must contain certain language regarding how the sheriff came into authority to transfer such real estate.  It is advised to consult with a real estate professional when dealing with a sheriff’s deed in Kansas.

Quit Claim Deeds

Lastly, a “quit claim deed” makes no warranty to the grantee (buyer) of the real estate about the ownership held by the grantor (seller) or the ownership to be conveyed upon the grantee. It simply means that any ownership that the grantor may have is being given to the grantee.

Real estate transactions and title insurance can be complicated and confusing. Tallgrass Title professionals are always available and willing to discuss your questions regarding deeds or any other aspect of your real estate transaction. It’s our job!

How Do Flood Zones Affect My Real Estate?

If the property you own or plan to own is located near a waterway, creek, river bottom or other low-lying area, it may be in a flood zone. These zones are areas that may have a likelihood of flooding. Did you know that your homeowner’s insurance policy probably won’t cover flood damage? What can you do to protect your property? What will a Lender require if you purchase real estate in a flood zone? Flood zones are also not covered by title insurance.  Since there are several flood zones in Riley, Pottawatomie and Wabaunsee Counties, we at Tallgrass Title would like to provide some basic information about them.

  1. Who determines where a flood zone is located?

The agency who oversees flood zones is FEMA (Federal Emergency Management Agency). This agency works with a floodplain administrator and community officials to produce maps showing where the risk areas are. Over time, flood zones may change, and new maps are drawn. According to FEMA, a flood zone is a “Special Flood Hazard Area” and is commonly referred to as a 100-year floodplain. This does not mean you can expect a flood once every 100 years. It means that a Special Flood Hazard Area has a one-percent chance of flooding each year.

  1. Is the real estate in a flood zone?

If you are purchasing real estate near a waterway or other low-lying area, it is a good idea to check whether the property is in a flood zone. Your realtor can usually assist with this question, but you can also check for yourself at the following link: https://msc.fema.gov/portal.

  1. If your real estate is in a flood zone, what will be required?

If you have a lender, they will require flood insurance if the house or structures are in a flood zone. This is a requirement that banks are forced to follow by bank regulations. It is wise to check the coverage of the policy to determine what is actually covered by the insurance. In most conventional residential loans, you will see a “flood zone determination” sheet. Usually, this simply notifies you that the lender checked to see if the real estate is in a flood zone. If the real estate is in a flood zone, there will be some additional paperwork.  If you have questions, speak with your lender or real estate agent.  The following link will answer a great deal of questions: https://www.fema.gov/national-flood-insurance-program

  1. Can my real estate be removed from a flood zone?

In some cases, it is possible to have the structure on your real estate reassessed and removed from the flood zone. There are certain procedures to follow to make that happen. The document that grants the amendment is called a LOMA (Letter of Map Amendment). The application for this document can be downloaded from the FEMA website. Most of the time, a licensed surveyor or other engineer will be required to provide elevations and a site map. FEMA will review the elevation and other data to make the determination. However, this process can take several months to complete.  Also, there are no guarantees as to whether the LOMA will be granted.

As you can see, there are questions that often arise with flood zones in real estate transactions. Our closing agents are trained to understand these concerns and answer questions you may have.

Kansas Farm Lease Basics

A common issue that comes up with the sale of agricultural real estate in Kansas is whether the real estate is currently leased to a farmer or rancher and when that tenancy ends. Simply put, if you purchase real estate that is currently leased to another person, you take the property subject to that lease.  This could mean that even though you purchased the real estate and received a deed, you may not have possession of that real estate until many months in the future!  If you know this fact in advance, it may be addressed in the contract to protect the interests of the buyers.

The information in this post is meant to educate the buyer of rural real estate so that there are no unexpected surprises following closing. In Kansas, absent a written agreement to the contrary, leases are governed by the Kansas Landlord Tenant Act.  This is basically a series of statutes (laws) that dictate the arrangement between land owners and tenants.  Again, written agreements may change this arrangement so long as they do not violate the Landlord Tenant Act.

Basically, all farm tenancies are year-to-year beginning and ending on March 1 of each year. If the owner of the real estate does not properly terminate the lease, it will automatically renew for another year.  One section that causes continuous issues, is the termination of farm tenancy statute.  If the owner of the real estate wishes to terminate a farm tenancy, written notice must be given to the tenant at least 30 days prior to March 1 and set the termination date for March 1.  Now, there are typically 28 days in February, which sets the typical termination date at January 29.  In a leap year, the termination date would be January 30.  As there are 31 days in January, this is counterintuitive as the termination dates do not fall on the last day of the month.  However, if there are already fall planted crops (typically wheat) on the real estate at the time of termination, the termination does not take place until the harvest of the crops or August 1, whichever is sooner.

Often, agricultural real estate is sold in February-April.  A contract for sale could foreseeably close after the tenancy termination deadline has expired and the Buyer would be subject to the existing lease.   An easy solution before entering into a contract during this time of year would be to request that the contract would be contingent upon adequate proof of termination of the tenancy.  Lastly, if there is a written contract, they often run on the calendar year and not the March 1-March 1 statutory term.  In order to avoid issues with written agreements, one needs to simply ask to review the contract, and any termination notice, prior to entering into an agreement to purchase.

Kansas agricultural leases can be a complicated subject.  Should you have any questions regarding your rural real estate transaction, feel free to call and ask to discuss the issue.

Email Fraud – the Everyday Scam

Over the last couple of years, there has been a growing concern about email hackers, scammers, and phishers. Here at Tallgrass Title we receive fishy-looking emails on a regular basis. Our title agents go through regular training sessions to help detect these potentially dangerous messages. In order to help you protect your clients and yourselves from these pitfalls, we would like to share some things we have learned.

Here are some red flags that usually indicate an email is not legit:

  1. The message contains grammar and punctuation errors. A lot of emails coming from scammers sound like they come from someone living in a foreign country. If the language does not make sense to you, don’t follow their instructions.
  2. The sending email is usually misspelled, even it it’s just one letter missing or added to it. This is a big one and is easily missed since it is so small. Instead of order@tallgrasstitleks.com you may see order@tallgrastitleks.com. (See, it can be very difficult to detect…)
  3. If you hover over the sender’s email address, it may show a different address. The email may say “from: order@tallgrasstitleks.com”, but when you move your cursor over it, there is a different email address or a whole string of random letters and characters.
  4. Another thing that should be an immediate cause of concern is any phrase that conveys a sense of urgency. Phrases like “do this immediately” or “as soon as possible” are often used. Also, the message might ask you to do something sooner or in a different order than you expected.

Here are some actions you can take:

  1. Google the company name in the auto sig. Does the address under the signature match the information on the company website?
  2. If you ever get a feeling that an email just doesn’t sound right, call the sender. Remember that you might not want to use the phone number listed in the suspicious email. Try to use a number you already have saved from before. Most people will be reasonable about it as soon as they realize that you are trying to protect them.
  3. Never send a client’s contact information or other personal information by email without protecting it. For example, do not email a completed deed packet back to us with the 1099 form. If the 1099 form has been filled out, it will have your client’s Social Security Number, address, and phone. This is a good opportunity for a scammer to steal your client’s identity!
  4. Use our paperless closer program to send documents to us. Access it through the client login on our website, www.tallgrasstitleks.com. We are able to view the document as soon as you upload it.
  5. Educate your clients. Go ahead and mention to your clients that there is a concern about this. Let them know a couple of things to watch out for.

Here at Tallgrass Title we are very serious about protecting our client’s information. Something very important to remember is, we will never ever email wire instructions without password protection. If someone emails wire information to us, we will call the sender to confirm. Please be sure to contact us if you have questions or concerns about a message you have received. We are always happy to take a phone call to confirm any instructions or requests we have sent to you.

Intro to 1031 Exchanges

Sam and Mary Lou bought a pasture in 1972 for about $20,000. They are ready to sell it now and know that someone would pay about $80,000 for it. They will incur about $60,000 of capital gain and will be subject to tax on this amount. At the same time, they would like to purchase a pasture closer to their home. Luckily for this couple, the IRC (Internal Revenue Code) allows for real estate owners to defer capital gains tax through a like-kind exchange.

What are the steps involved in a 1031 exchange?

The first step is to hire an attorney or some other appropriate professional who can assist you with the exchange. There are certain documents needed to facilitate the exchange and you will need someone to draft those for you.
The second step is to complete the sale of your real estate. The real estate sold is called the relinquished property. If you are using a real estate agent, tell that person as soon as possible that you are doing an exchange. The most important part of the process is that you cannot receive the proceeds from the sale of your relinquished property. The title company will send your proceeds from the sale to a third party to hold until you purchase your replacement property. If the proceeds are given to you, they are immediately taxable.
The third step is to identify your replacement property and complete the purchase. During the closing, your title company will collect the proceeds from the third party, then apply them towards the purchase price.

What are some things to keep in mind about a 1031 exchange?

There are many rules governing 1031 exchanges. You do not need to learn all of them; a professional can help guide you through the process. Here are a couple of things to keep in mind:
A 1031 takes some time to happen. If you are thinking about doing one, you should talk to a professional as soon as possible. Don’t wait until the week before closing to talk to someone about it, because it could cause delays.
There are certain deadlines after closing that must be met. There is a deadline from the sale of your relinquished property to identify your replacement property. There is also a deadline from the sale of your relinquished property to complete the purchase of your replacement property and officially complete the 1031 exchange.
There are also requirements for the type of property that qualifies for this treatment. The basic rule is that the property must be “investment property”. The IRS has very specific rules for what qualifies as investment property.

A 1031 transaction can sound intimidating, with a lot of information to remember. At Tallgrass Title, our closing agents are specifically trained on how to handle your 1031 exchange.

Digital Order Submission, Courier Service and Drop Box, oh my!

At Tallgrass Title, our goal is to make your transaction or refinance as smooth and convenient as possible.   We understand that the daily life of a home buyer or seller can be quite busy.  Real estate agents can often be juggling multiple transactions while assisting several clients.  Likewise, bankers and lawyers can find it hard to physically bring documents to one of our offices.  The purpose of this post is to illustrate several order submission and document delivery options that Tallgrass Title has put in place to ease the process.

To assist in the process, we have several options to submit orders or deliver documents to our office. With technology rapidly developing, the simplest way to submit an order for title insurance is through our Paperless Closer system.  Simply upload an order for title insurance or upload a contract directly to our system.  An earnest money check can then be delivered to our office during office hours or deposited in our new 24-hour drop box at our Wamego, Kansas location.  Additionally, our website has an additional portal for submitting an order if you have not yet set up a Paperless Closer login with our office.

Tallgrass Title also offers a free courier service in our primary service area of Riley, Pottawatomie and Wabaunsee Counties. For example, our couriers will travel to Manhattan, Kansas to pick up documents needed for your real estate transaction.  Additionally, we will deliver proceeds checks or commission checks wherever needed.  Our courteous couriers are all licensed and bonded notaries as well.  So, if a deed packet needs to be executed in front of a notary and returned to our office, simply call for our courier service.  We strive daily to make the title insurance and real estate closing process as simple as possible.  We want to know if there is a way that we can make the real estate closing process easier and more streamlined for you.  Should you have any ideas or suggestions that will help the process, please feel free to let us know.  Remember, we work for you!

To Divide to not To Divide Rural Acreage

Rural real estate is most commonly sold in single tracts. Occasionally, people wish to sell a portion from a larger tract.  In this scenario, the transaction can become a little “sticky” for a number of reasons.  These reasons could be as complex as county or city zoning, or as straightforward as a lack of access.  So, what are some items to look into if you are going to be splitting land?

Boundary Lines

In most cases, when real estate is being divided, a survey will be required. The survey calculates and sets out very specific boundaries.  Usually the Surveyor will place markers to clearly mark the corners of the real estate.  The surveyor will then produce a formal “Survey” which is essentially a diagram of the real estate.  Additionally, a “legal description” will be produced which is a written description of the real estate.  It is important to work with your surveyor so that you know the costs and timelines for the completion of this work.

Zoning

A common misconception is that if you own land you can do whatever you want on it. Unfortunately, it does not always work like that.  No matter where you live, you will have to face rules and regulations regarding zoning.  There will be rules and regulations that are similar from County to County, but there will also be County specific zoning requirements.  No matter what you are doing, make sure that you research your local zoning requirements, otherwise, you may start a transaction you are not allowed to finish.  Are you allowed to divide the land?  If so, is any special documentation required?  Is there a minimum tract size that the county requires?  These questions and more can be answered by your County Zoning Administrator or your City Planning and Zoning department.

Fencing

In Kansas, the owner of rural real estate may be required to fence and or maintain an existing fence. If the real estate that is being divided is fenced, the new owner could be responsible for a portion of the construction and maintenance of a new fence dividing the property.  It is essential to investigate the costs of such construction and maintenance.

Access to the Property

How will you access the divided tract? Click here to read our last post that deals in part with access to rural real estate.

As you can see, there are a lot of issues to consider when splitting off tracts of land from a larger piece.  However, it can be done.  Most real estate professionals will have some idea of what some basic county requirements are for your area, or they can put you in touch with the people who are tasked with enforcing such requirements.  If you are considering dividing real estate, give us a call.  We are here to help you navigate your real estate transaction.  It’s our job!

Building on Rural Real Estate

Many Kansans in our area have a desire to construct a home on real estate lying outside of a city and outside of a “platted” subdivision. The country can lend peace and tranquility to the setting and offer some of the Flint Hill’s most gorgeous views. Additionally, living in a rural area can offer the freedom to pursue rural hobbies like raising animals, having a large garden and having s’mores by a bonfire.  However, there are a few things to take into consideration when moving forward with this dream.

Location of the real estate

Where is the real estate? Finding the right mix between rural and city dwelling is a common issue future homeowners must weigh.  Although rural life may be the goal, it is necessary to determine how far you want to live from modern services. Is the real estate located on pavement or gravel?  Does the county have any plans to pave the gravel?  How well maintained is the road?  Is it passable in all weather?

Another question regarding location is applicable zoning. If you are not purchasing an entire tract of real estate are you allowed to divide off a portion to be purchased?  (Keep an eye out for next week’s blog where we will discuss issues regarding dividing real estate from a larger tract.) Are you allowed to construct a single family dwelling?  Do you have the requisite acreage for a septic system or lagoon?  Will the ground support a foundation, septic system, driveway, etc.?  These questions will need to be addressed prior to beginning the construction process.

Access to Land

Believe it or not, lack of access can be an easily overlooked issue. Simply put: how does one access the purchased tract?  It is important to look into the zoning requirements for a driveway or travel easement.  Oftentimes an easement will be needed to cross neighboring property to access your building site.  Also, does zoning allow two addresses to use the same driveway?  Will the county allow you to create an access point to your real estate where you want it?  It is important to address access concerns, because, if there is a lack of access, and no one is ready to give an easement, what is the point in purchasing the tract?

Access to Utilities

An often overlooked issue is the access to modern utilities like water and electricity. In town it is easier to bring city water and electricity to new build cites and for the new sewer lines to tap into the city sewer system.  However, in the country, it can be more difficult. Here are a few common questions to answer:

  1. Is electricity available at the site? Is it a rural electric cooperative or an electric company? How much will it cost to run the electricity to the divided property?
  2. Is water available? Is there a rural water district? How far is the closest line? Is there adequate capacity for a new structure? If rural water is unavailable is a well an option?
  3. How will sewer waste be handled? Is a septic tank or lagoon an option?

As you can see, the simple rural life could prove to be confusing during the acquisition and build process. Luckily, we commonly deal with these issues and are eager to assist in answering these questions.  It’s our job!