Our office receives many
questions from individuals each year pertaining to the status
of their real estate or the real estate of a family member
once one of the owners dies. The most common question is "Do I
have to go to Court in order to obtain good title to my
property?" The most common example is the widow whose husband
dies some months before and she is advised by a relative that
she would have to seek court action in order to clear the
title to the property and place it solely in her name. She and
her husband held title as tenants by the entirety which is a
common form of ownership (or as joint tenants) amongst married
couples. When a couple owns property as tenants by the
entirety they each own an undivided one-half of the real
estate. The most important feature, however, of tenancy by the
entirety is that the surviving spouse obtains full interest in
the real estate upon the death of the other spouse. Thus, the
widow received the full interest of the real estate
immediately upon the death of her husband.
However, most people
don’t understand that although the property passed to the
surviving joint tenant without need of Court intervention,
there is in many states an estate tax issue left unresolved.
Even if no tax is owed at time of death by the decedent, most
states require that a release of some sort be applied for and
filed in the office where the property records lie. The
recording of these releases are done so that future purchasers
or mortgagees will know that no estate tax was due and no
estate tax lien exists on the property.
Our office is well able
to assist you in this effort should the need arise. We are
glad to explain our services in this area more fully and
provide you with the costs associated with our representation.
If you or anyone you know falls within these circumstances, it
is wise for them to consult with our office to resolve these
matters.
Since the early 1980's
almost all lenders nationwide have required title insurance as
a prerequisite to accepting mortgages on residential and
commercial real estate. Although title insurance companies
have been writing such insurance since the late 1800's its
popularity has grown with the onset of secondary market
mortgages. These are mortgages which are originated locally
and sold nationally to investors in the same way that bonds
and other securities are sold. Real estate title insurance
very simply is an insured statement of the conditions of one's
title or ownership rights to a certain piece of real estate.
The policy guarantees that the property being purchased or
mortgaged is free from undisclosed liens or rights and it
guarantees additionally that any confusion as to rights of
ownership will be resolved in favor of the party owning the
real estate or the company will refund the policy limits to
the policy holder.
A party purchasing real
estate is always offered the opportunity to purchase an
Owner's Policy of Title Insurance by the party conducting the
real estate closing. For example, you decide to purchase a
house in Boston and are obtaining a mortgage to help you
finance the purchase from a bank or mortgage company. The
lending institution will require an attorney or title agent to
research the title to the property and issue them a Lender's
Policy of Title Insurance. This assures to the lender that the
property is or will be owned by the purchaser, and that no
defects, liens or encumbrances exist on the property that
would adversely affect the marketability of the title.
Furthermore, the lender's policy guarantees that the mortgage
will be recorded properly and secures the property for the
repayment of the loan. Since the closing attorney is already
issuing a lender's policy of title insurance the buyer has the
opportunity at that time to obtain an owner's policy of title
insurance at a cost substantially less than the buyer would
pay if the policy was not written simultaneously with the
lender's policy.
The owner's policy of
title insurance insures that the owner has good and marketable
title to the property - free from any encumbrances or liens
that would adversely affect the property with the exception of
defects or liens made known to the buyer, and insures to the
owner that if any such liens, encumbrances, defects or other
title problems become known, the title insurer will defend the
buyer's title to the property.
In many instances we are
asked whether or not title insurance is necessary or advisable
for the owner to purchase. We recommend the purchase of the
title insurance for a few simple reasons. First, the premium
for purchase of the title insurance policy is a one time
charge. Since the purchaser is usually borrowing money to
finance the purchase of the property, the majority of the cost
of the title insurance policy has been paid for by the
premiums of the lender's policy which is required by the loan.
Usually for a few hundred dollars or less the owner can insure
against a variety of problems which could occur in the future
as relates to his property. These items include forged
documents in the chain of title, signatures of mentally
incompetent persons or minors which are unknown to the party
reviewing the title, mistakes or inaccuracies in recording of
legal documents of title, undisclosed or missing heirs, fraud
in the execution or in the handling of a transaction in the
prior chain of title, invalid divorces or misrepresentation of
marital status of the parties signing the documents, unpaid
taxes which were not paid prior to the purchase of the
property, and most importantly clerical errors in the public
records and claims of parties unknown because their claims
have not been filed in any indices of public record. These are
just a few of the issues which can arise in the title to
anyone's real estate.
Our office has seen
defects in titles which could not be revealed by examination
of the public records. These defects arise at a time after the
transaction has taken place and often purchasers suffer
significant losses as a result of them. That is why owner's
title insurance makes a great deal of sense. Title insurance,
like any other insurance, protects against the eventuality of
an unforeseen and an unfortunate circumstance.
