Sunday, March 30, 2008

Homeowner'S Policy Of Title Insurance

Providing the Best to REALTORS®
The superior coverage of the Homeowner's Policy of Title Insurance, backed by the nation's best title insurer, provides outstanding benefits to REALTORS® as well. Here's how:

  • Reduces the REALTORS® exposure in a transaction regarding certain regulatory matters.
  • Increases the client's satisfaction and confidence by providing the finest protection available.
  • Helps ensure the client's ability to resell the home in the future, free of potentially damaging title problems.
  • Gives the REALTOR® and client peace of mind in the increasingly complex world of real estate. Informing clients about premium title insurance such as the Homeowner's Policy makes good business sense. With superior title coverage issued through a b and reputable title insurer, REALTORS® and clients benefit from two critical layers of protection.
Providing the Best to Homeowners
Homeowners depend upon the strength and stability of a reputable title insurer to back their policies for years to come. Chicago Title has a long and proud history of providing homeowners with the most innovative title and escrow products in the industry.

With Chicago Title, homeowners can enjoy peace of mind knowing they are insured by one of the industry's premier title insurers. And with the Homeowner's Policy, they'll enjoy even more peace of mind knowing they have the best title policy available.

Superior All-Inclusive Benefits from the Homeowner's Policy
This superior policy gives your clients the most thorough and comprehensive coverage available in the industry.

The new Homeowner's Policy includes the following basic coverage:

  • False impersonation of the true owner of the property
  • Forged deeds, releases or wills
  • Undisclosed or missing heirs
  • Instruments executed under invalid or expired power of attorney
  • Mistakes in recording legal documents
  • Misinterpretation of wills
  • Deeds by minors
  • Deeds by persons supposedly single, but in fact married
  • Liens for unpaid estate, inheritance, income or gift taxes
  • Fraud

The Homeowner's Policy also Provides the Following Additional Benefits

  • Pre and Post Policy Protections: The Homeowner's Policy coverage protects homeowners against claims arising both before and after the policy date. The homeowner is covered if someone else has an interest in or claims to have rights affecting the title, or the title is defective. Post-policy protection also includes coverage for forgery, impersonation, easements, use limitations and structural encroachments built by neighbors (except for boundary walls or fences) after the policy date.
  • Expanded Access Coverage: The Homeowner's Policy provides homeowners with expanded access protection for right of access to and from the property. Traditional title policies do not define the type of access a homeowner has to the property, but the Homeowner's Policy specifically insures both actual pedestrian and vehicular access, based upon a legal right.
  • Restrictive Covenant Violations: The Homeowner's Policy protects homeowners against the loss of title to property because of a violation of a restrictive covenant that occurred before the insured acquired title.
  • Building Permit Violations: The Homeowner's Policy covers homeowners if they must remove or remedy an existing structure (except for boundary walls and fences) because it was built without a building permit from the proper government office. This coverage is subject to deductible amounts and maximum limits of liability.
  • Subdivision Law Violations: The Homeowner's Policy protects homeowners if they can't sell the property or get a building permit because of a violation of an existing subdivision law. Homeowners are also protected if they are forced to correct or remove the violation. This coverage is subject to a policy deductible and maximum limits of liability.
  • Zoning Law Violations: The Homeowner's Policy protects homeowners if they must remove or remedy existing zoning laws or regulations (subject to the policy deductible and maximum limit of liability). Homeowners are also protected if they can't use the land for a single-family residence due to the way the land is zoned.
  • Encroachment Protections: Covers homeowners if forced to remove an existing structure because it encroaches on a neighbor's land (coverage for encroachments of boundary walls or fences is subject to policy deductible and maximum limit of liability). Covers homeowners when someone else has a legal right to, and does, refuse to perform a contract to purchase the homeowner's land, lease it or make a mortgage loan on it because a neighbor's existing structures encroach onto the land.
  • Water and Mineral Rights Damage: The Homeowner's Policy provides coverage if a homeowner's existing improvements, including lawns, shrubbery and trees, are damaged because someone exercised a right to use the surface of the land for the extraction of minerals or water.
  • Supplemental Tax Lien: The Homeowner's Policy protects homeowners if a supplemental tax lien is filed and assessed against the property because of new construction or a change of ownership prior to the policy date.
  • Map Inconsistencies: The Homeowner's Policy provides coverage if the map attached to the homeowner's policy does not show the correct location of the land, according to public records.
  • Continuous Coverage: The Homeowner's Policy covers homeowners forever, even if they no longer have the title. The policy insures anyone who inherits the title because of the homeowner's death and the spouse who receives the title after a dissolution of marriage. The Homeowner's Policy also allows homeowners to transfer title to their home into a trust after the policy date and receive uninterrupted coverage, at no extra cost.
  • Value-Added Protection: Traditional title policies don't increase their coverage as the value of a home increases. Not so with the Homeowner's Policy. The policy amount automatically increases by ten percent per year for five years, up to 150% over the original policy amount. This automatic increase in coverage is included at no extra cost.

How to Offer Homeowner's Policy Coverage
Your Chicago Title Representatives can provide you and your clients with information about the Homeowner's Policy coverage in simple, easy-to-understand language. Your representative is also available to meet with your clients personally to explain the Homeowner's Policy or any other product we offer. Simply request the Homeowner's Policy Coverage packet for your client when opening an escrow. It's that easy!

Title Policy Coverage Comparison
Protect yourself as a REALTOR® while protecting your clients with superior title insurance coverage. Call your local Chicago Title Representative for more details or specific policy language pertaining to the Homeowner's Policy of Title Insurance. This coverage has certain limitations and exclusions that apply. This policy has been adopted by both the CLTA and ALTA.

Coverage Item CLTA Standard Coverage ALTA Residential (Plain Language) New Homeowner's Policy
Post Policy Forgery Protection No No Yes
Enhanced Access Coverage No No Yes
Building Permit Violations No No Yes
Subdivision Map Act Coverage No No Yes
Restrictive Covenant Violations No No Yes
Mineral Extraction Coverage No No Yes
Map Inconsistencies Coveragem No No Yes
Coverage Extended to Living Trusts No No Yes
Enhanced Encroachment Coverage No No Yes
Automatic Inflation Protection (5 years) No No Yes

Protect yourself as a REALTORS® while protecting your clients with superior title insurance coverage. Call your local Chicago Title Representative for more details or specific policy language pertaining to the Homeowner's Policy of Title Insurance.

This coverage has certain limitations and exclusions that apply.

This policy has been adopted by both the CLTA and the ALTA.

21 Reasons For Title Insurance

Buying Property Is A Numbers Business

  1. A fire destroys only the house and improvements. The ground is left. A defective title may take away not the only the house but also the land on which it stands. Title insurance protects you (as specified in the policy) against such loss.
  2. A deed or mortgage in the chain of title may be a forgery.
  3. A deed or a mortgage may have been signed by a person under age.
  4. A deed or a mortgage may have been made by an insane person or one otherwise incompetent.
  5. A deed or a mortgage may have been made under a power of attorney after its termination and would, therefore, be void.
  6. A deed or a mortgage may have been made by a person other than the owner, but with the same name as the owner.
  7. The testator of a will might have had a child born after the execution of the will, a fact that would entitle the child to claim his or her share of the property.
  8. A deed or mortgage may have been procured by fraud or duress.
  9. Title transferred by an heir may be subject to a federal estate tax lien.
  10. An heir or other person presumed dead may appear and recover the property or an interest therein.
  11. A judgment or levy upon which the title is dependent may be void or voidable on account of some defect in the proceeding.
  12. Title insurance covers attorneys’ fees and court costs.
  13. Title insurance helps speed negotiations when you’re ready to sell or obtain a loan.
  14. By insuring the title, you can eliminate delays and technicalities when passing your title on to someone else.
  15. Title insurance reimburses you for the amount of your covered losses.
  16. A deed or mortgage may be voidable because it was signed while the grantor was in bankruptcy.
  17. Each title insurance policy we write is paid up, in full, by the first premium for as long as you or your heirs own the property.
  18. There may be a defect in the recording of a document upon which your title is dependent.
  19. Claims constantly arise due to marital status and validity of divorces. Only title insurance protects against claims made by non-existent or divorced "wives" or "husbands."
  20. Many lawyers, in giving an opinion on a title, protect their clients as well as themselves, by procuring title insurance.
  21. Over the last 24 years, claims have risen dramatically.

We Hope You Never Have A Title Claim
Americans have the future in mind when they buy a house, and they purchase homeowner’s insurance to help protect that future. But with home ownership comes the need to protect the property against the past, as well as the future.

Title insurance protects a policyholder against challenges to rightful ownership of real property, challenges that arise from circumstances of past ownerships. Each successive owner brings the possibility of title challenges to the property.

When you purchase real property, rely on Chicago Title to protect your interests. You’ll be insured by a company backed by more than 150 years of successful title operations.

Rely On Chicago Title To Protect Your Investment
Every owner, purchaser and beneficiary, whether by a deed or contract, should have an insured title. The entire investment depends upon the quality of title. If you are buying real estate mortgages, you are paying for a good title and you should see that you have one. If either fire insurance or title insurance is omitted, your security is not complete.

Our title policy protects you against unforeseen defects in title that an abstract or the public records do not show and cannot show…nor any attorney’s opinion includes.

Whether this is your first or fiftieth real estate investment, ask your real estate agent or broker to specify Chicago Title during your transaction.

Common Ways To Hold Title

HOW YOU TAKE TITLE - ADVANTAGES AND LIMITATIONS:
Title to real property in California may be held by individuals, either in Sole Ownership or in Co-Ownership. Co-Ownership of real property occurs when title is held by two or more persons. There are several variations as to how title may be held in each type of ownership. The following brief summaries reference seven of the more common examples of Sole Ownership and Co-Ownership.

SOLE OWNERSHIP

  • A man or woman who is not married.
    Example: John Doe, a single man.

  • An Unmarried Man/Woman:
    A man or woman, who having been married, is legally divorced.
    Example: John Doe, an unmarried man.

  • A Married Man/Woman, as His/Her Sole and Separate Property:
    When a married man or woman wishes to acquire title as their sole and separate property, the spouse must consent and relinquish all right, title and interest in the property by deed or other written agreement.
    Example: John Doe, a married man, as his sole and separate property.

CO-OWNERSHIP

  • Community Property:
    Property acquired by husband and wife, or either during marriage, other than by gift, bequest, devise, descent or as the separate property of either is presumed community property.
    Example: John Doe and Mary Doe, husband and wife, as community property.
    Example: John Doe and Mary Doe, husband and wife.
    Example: John Doe, a married man

  • Joint Tenancy:
    Joint and equal interests in land owned by two or more individuals created under a single instrument with right of survivorship.
    Example: John Doe and Mary Doe, husband and wife, as joint tenants.

  • Tenancy in Common:
    Under tenancy in common, the co-owners own undivided interests; but unlike joint tenancy, these interests need not be equal in quantity and may arise at different times. There is no right of survivorship; each tenant owns an interest, which on his or her death vests in his or her heirs or devisee.
    Example: John Doe, a single man, as to an undivided ѕ ths interest, and George Smith, a single man as to an undivided 1/4th interest, as tenants in common.

  • Trust:
    Title to real property in California may be held in trust. The trustee of the trust holds title pursuant to the terms of the trust for the benefit of the trustor/beneficiary.

The preceding summaries are a few of the more common ways to take title to real property in California and are provided for informational purposes only.

There are significant tax and legal consequences on how you hold title. We strongly suggest contacting an attorney and/or CPA for specific advice on how you should actually vest your title.

CONCURRENT CO-OWNERSHIP INTERESTS
The comparison below is provided for information only, it should not be used to determine how you hold title. We highly recommend that you seek professional counsel from an attorney and/or CPA to determine the legal and tax consequences of how title is vested.

COMMUNITY PROPERTY JOINT TENANCY TENANCY IN COMMON TENANCY IN PARTNERSHIP TITLE HOLDING TRUST
PARTIES Only husband and wife Any number of persons (can be husband and wife) Any number of persons (can be husband and wife) Only partners (any number) Individuals, groups of persons, partnerships or corporations, a living trust
DIVISION Ownership and managerial interests are equal except control of business is solely with managing spouse Ownership interests must be equal Ownership can be divided into any number of interests equal or unequal Ownership interest is in relation to interest in partnership Ownership is a personal property interest and can be divided into any number of interests
TITLE Title is in the "community." Each interest is separate but management is unified Sale by joint tenant severs joint tenancy Each co-owner has a separate legal title to his/her undivided interest Title is in the "partnership" Legal and equitable title is held by the trustee
POSSESSION Both co-owners have equal management and control Equal right of possession Equal right of possession Equal right of possession, but only for partnership purposes Right of possession as specified in the trust provisions
CONVEYANCE Personal property (except "necessaries") may be conveyed for valuable consideration without consent of other spouse; real property requires written consent of other spouse, and separate interest cannot be conveyed except upon death Conveyance by one co-owner without the others breaks the joint tenancy Each co-owner’s interest may be conveyed separately by its owner Any authorized partner may convey whole partnership property for partnership purposes Designated parties within the trust agreement authorize the trustee to convey property. Also, a beneficiary’s interest in the trust may be transferred.
PURCHASER'S STATUS Purchaser can only acquire whole title of community; cannot acquire a part of it Purchaser will become a tenant in common with the other co-owners in the property Purchaser will become a tenant in common with the other co-owners in the property Purchaser can only acquire the whole title A purchaser may obtain a beneficiaries interest by assignment or may obtain legal and equitable title from the trust
DEATH On co-owner’s death, Ѕ belongs to survivor in severalty. Ѕ goes by will to descendants devisee or by succession to survivor On co-owner’s death his/her interest ends and cannot be disposed of by will. Survivor owns the property by survivorship On co-owner’s death his/her interest passes by will to devisee or heirs. No survivorship rights. On partner's death, his/her partnership interest passes to the surviving partner pending liquidation of the partnership. Share of deceased partner then goes to his/her estate Successor beneficiaries may be named in the trust agreement, eliminating the need for probate.
SUCCESSOR'S STATUS If passing by will, tenancy in common between devisee and survivor results. Last survivor owns property Devisee or heirs become tenants in common Heirs or devisee have rights in partnership interest but not specific property Defined by the trust agreement, generally the successor becomes the beneficiary and the trust continues
CREDITOR'S RIGHTS Property of community is liable for debts of either spouse, which are made before or after marriage. Whole property may be sold on execution sale to satisfy creditor Co-owner’s interest may be sold on execution sale to satisfy creditor. Joint tenancy is broken. Creditor becomes a tenant in common Co-owner’s interest may be sold on execution sale to satisfy his/her creditor. Creditor becomes a tenant in common Partner's interest cannot be seized or sold separately by his/her personal creditor but his/her share of profits may be obtained by a personal creditor. Whole property may be sold on execution sale to satisfy partnership creditor Creditor may seek an order for execution sale of the beneficial interest or may seek an order that the trust estate be liquidated and the proceeds distributed
PRESUMPTION Strong presumption that property acquired by husband and wife is community Must be expressly stated Favored in doubtful cases except husband and wife case Arise only by virtue of partnership status in property placed in partnership A trust is expressly created by an executed trust agreement

Steps In The Title Process

Initial Request for Title Insurance
An order for title insurance is opened with a title officer who produces the initial response promptly within 24 to 48 hours. A preliminary report can be issued with the minimum of information; without even identifying the buyer or the terms of the sale. It shows the record title as it presently exists and is only an offer to provide insurance. To order a preliminary report contact your local Chicago Title representative or office.

On-Site Searching and Examining
Your title officer performs three searches: Property, Name, and Tax searches. From that information, a preliminary report is created. Our on-site customer service center expedites the process of obtaining hard copies of recorded documents. Imaging helps to expedite searches with the ability to obtain documents on-line.

Technical Review
The skill and expertise of our title officer is the key to providing you with a useful, accurate title report. Once the report is issued the review begins by making a technical analysis of the documents of record. An interpretive view of all recorded matters is made to evaluate their impact on the title to the property. Among the questions the examiner asks are: Would any of the recorded matters prevent the buyer from using the property for its intended purpose? Can antiquated leases be eliminated from the policy per a review of the current leases?

Inspection Analysis
In anticipation of ALTA coverage, a site inspection is ordered. From the inspection report, the initial title product is supplemented to show any encroachments or other off-record matters which would ultimately impact the title.

Re-Insurance
The title insurer will insure up to the total sale price or loan amount, and then employs another title insurance company to insure them. The premium paid to the re-insurance title company is deducted from the title fees; it is not an additional charge to the parties. Re-insurance is handled by the Title Department when requested by the proposed insured or is required based upon self-imposed or statutory title insurance limits.

Co-Insurance
The proposed insured may only allow the title insurance company to insure up to a certain amount (i.e. not the total sale price or loan amount). The insuring company must employ another title insurance company to insure the remainder of the sale price or loan amount. When there is co-insurance, the customer is charged based upon each company’s filed rates for the portion of the total liability covered by that company. The co-insurance company may be chosen by the customer.

We Earn Your Respect with our Skills, Service and Solutions
We try not to point out impediments to the close of a transaction without also offering assistance and solutions. By understanding the sometimes delicate balance of the interests of the parties to a transaction, and by professionally and courteously handling issues as they arise, we can capably guide a transaction to a successful conclusion.

Documents in the Title Process

  • Preliminary Report
  • Commitment - Shows the condition of title in the way we are willing to issue it.
  • Pro Forma - Specimen of what the requested policy, as requested, will look like. Underwriting issues not completed. Not binding upon the company.
  • Policy - Final product. Contract of indemnity between named insureds and the company.