MICHAEL R. KADOCH PA.
MK REAL ESTATE & CORPORATE LAW FIRM
Michael R. Kadoch P.A is one of the premier firms in southeast Florida concentrating on residential and commercial real estate transactions, and related services. Call Us Today For A FREE Consultation.
PREMIER LAW FIRM
We mirror our clients’ focus on their business and family by servicing their legal needs in the areas of real estate, land development, transaction and business succession planning.
What is Title Insurance?
A Word About Real Estate
Real estate has traditionally been a family’s most valuable asset. It is a form of wealth that is protected by many laws. These laws have been enacted to protect one’s ownership of real estate and the improvements located on the land. The owner, the owner’s family, and the owner’s heirs may have rights or claims in and to the property that you are buying. Those who may have an interest in or lien upon the property could be governmental bodies, contractors, lenders, judgment creditors, the Internal Revenue Service, or various other individuals or corporations. The real estate may be sold to you without the knowledge of the party having a right or claim in and to the property. In addition, you may purchase the real estate without having any knowledge of these rights or claims. In either event, these rights or claims remain attached to the title to the property that you are buying until they are extinguished.
The Past Can Determine Your Future
Generally, a person thinks of insurance in terms of the payment of future loss due to the occurrence of some future event. For instance, a party obtains automobile insurance in order to pay for future loss occasioned by a future “fender bender” or for the future theft of the car. Title insurance is a unique form of insurance. It provides coverage for future claims or future losses due to title defects which are created by some past event (i.e., event prior to the acquisition of the property.) These risks are far less obvious than those protected against by automobile insurance, but can be just as devastating. The following information will answer some commonly asked questions about title insurance.
How Does Lawyers Title Find Out What Title Risks Exist?
In order to determine the status of title, Lawyers Title conducts a diligent search of the public records for those documents associated with the property. Lawyers Title then examines those recorded documents in order to determine if there are any rights or claims that may have an impact upon the title to the property. The title search may reveal the existence of recorded defects, liens or encumbrances upon the title such as unpaid taxes, unsatisfied mortgages, judgments and tax liens against the current or past owners, easements, restrictions and court actions. Matters that are discovered in the search can be excepted, resolved or extinguished prior to the closing of the transaction. In addition, you are protected against any loss or damage resulting from recorded defects, liens or encumbrances that are within the scope of coverage of the particular policy issued in the transaction.
What About Hidden Title Risks?
The title to the property that you have purchased could be seriously threatened or lost completely by hazards which are considered “hidden risks.” “Hidden Risks” are those matters, rights or claims that are not shown by the public records and, therefore, are not discoverable by a search and examination of those public records. Matters such as forgery, incompetency or incapacity of the parties, fraudulent impersonation, and unknown errors in the records are examples of “hidden risks” which could provide a basis for a claim after you have purchased the property. The policies issued by Lawyers Title protect you against many of these “hidden risks.”
How Does a Title Insurance Policy Protect an Insured Owner?
In the event of a covered matter affecting your title, your insurance policy may protect you in various ways including: (1) Defending your title, (2) Bearing the cost of settling the covered matter, or (3) Paying you for the loss due to the covered matter.
Only One Premium
Unlike other forms of insurance, the original premium is your only cost as long as you own the property. There are no annual payments to keep your Owner’s Title Insurance Policy in force.
Why Do You Need Title Insurance?
To protect possibly the most important investment you’ll ever make – the investment in your home. With a title insurance policy, you as owner, have an indemnity contract that will reimburse you for loss in the event someone asserts a claim against your property that is covered by the policy.
How can there be a title defect if the title has been searched?
Title insurance is issued after a careful examination of copies of the public records. But even the most thorough search cannot absolutely assure that no title hazards are present, despite the knowledge and experience of professional title examiners. In addition to matters shown by public records, other title problems may exist that cannot be disclosed in a search.
What title insurance protects against
Here are just a few of the most common hidden risks that can cause a loss of title or create an encumbrance on title:
- False impersonation of the true owner of the property
- Forged deed, releases or wills, Instruments executed under invalid or expired power of attorney;
- Undisclosed or missing heirs; Mistakes in recording legal documents
- Misinterpretations of wills Deeds by persons of unsound mind
- Deeds by minors
- Deeds by persons supposedly single, but in fact married
- Liens for unpaid estate, inheritance, income or gift taxes
What protection does title insurance provide against defects and hidden risks?
Title insurance will pay for defending against any lawsuit attacking your title as insured, and will either clear up title problems or pay the insured’s losses. For a one-time premium, an owner’s title insurance policy remains in effect as long as you, or your heirs, retain an interest in the property.
What this means to you
The peace of mind in knowing that the investment you’ve made in your home is a safe one.
Call Michael R. Kadoch P.A
If you have any questions concerning title insurance coverage, please call Michael R. Kadoch P.A office, . We are here to assist you.
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 Michael R. Kadoch P.A 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 online.
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?
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.
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.
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
When we identify impediments to closing a transaction, we also offer 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 contract of indemnity between named insureds and the company.
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.
- 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.
- 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 ¾ ths interest, and George Smith, a single man as to an undivided 1/4th interest, as tenants in common.
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.
21 Reasons For Title Insurance
Buying Property Is A Numbers Business
- A fire destroys only the house and improvements. The ground is left. A defective title may take away not only the house but also the land on which it stands. Title insurance protects you (as specified in the policy) against such loss.
- A deed or mortgage in the chain of title may be a forgery.
- A deed or a mortgage may have been signed by a person under age.
- A deed or a mortgage may have been made by an insane person or one otherwise incompetent.
- A deed or a mortgage may have been made under a power of attorney after its termination and would, therefore, be void.
- A deed or a mortgage may have been made by a person other than the owner, but with the same name as the owner.
- 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.
- A deed or mortgage may have been procured by fraud or duress.
- Title transferred by an heir may be subject to a federal estate tax lien.
- An heir or other person presumed dead may appear and recover the property or an interest therein.
- A judgment or levy upon which the title is dependent may be void or voidable on account of some defect in the proceeding.
- Title insurance covers attorneys’ fees and court costs.
- Title insurance helps speed negotiations when you’re ready to sell or obtain a loan.
- By insuring the title, you can eliminate delays and technicalities when passing your title on to someone else.
- Title insurance reimburses you for the amount of your covered losses.
- A deed or mortgage may be voidable because it was signed while the grantor was in bankruptcy.
- 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.
- There may be a defect in the recording of a document upon which your title is dependent.
- 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.”
- Many lawyers, in giving an opinion on a title, protect their clients as well as themselves, by procuring title insurance.
- 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 homeowners insurance to help protect that future. But with homeownership 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 Michael R. Kadoch P.A to protect your interests. You’ll be insured by a company backed by a long history of successful title operations.
Rely On Michael R. Kadoch P.A 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 Michael R. Kadoch P.A during your transaction.
The Preliminary Report
The Preliminary Report is an offer to issue a policy of title insurance covering a particular estate or interest in land subject to stated exceptions.
Since these exceptions may point to potential problems with your intended purchase, it is important for all parties to review the report once it is received.
A Preliminary Report provides a list of the matters which will be shown as exceptions to coverage in a designated policy or policies of title insurance, if issued currently, covering a particular estate or interest in land. It is designed to provide an interim, or “preliminary” response to an application for title insurance and is intended to facilitate the issuance of the designated policy or policies. It is normally prepared after application (order) for such policy(ies) of title insurance on behalf of the principals to a real property transaction, for the purpose of facilitating requirements relative to closing and policy issuance in form and content approved by those parties.
If a title policy is not contemplated, a Preliminary Report should not be ordered. Instead, consideration should be given to requesting a Condition of Title Report or other similar title product.
The Preliminary Report states on its face that it is made solely to facilitate the subsequent issuance of a title insurance policy and that the insurer assumes no liability for errors in the report. Accordingly, any claim arising from a defect in title must be made under the title policy and not the Preliminary Report.
After a title order has been placed, matters relative to the title policy coverage on the subject property are assembled in a title search package and examined by skilled technicians. This is when the Preliminary Report is prepared and sent to the customer. The report contains relevant information so that the parties to the transaction will become aware of matters which will not be insured against by the title company. This report is issued before the title policy, hence the name Preliminary Report.
The matters shown in the report are as follows:
- The estate of interest covered.
- The owner of the estate or interest.
- The parcel of land involved.
- The exceptions, liens, encumbrances and other risks which will not be insured against if a title policy is issued.
- Other requirements and provisions which are reflected as “Notes” in the Preliminary Report which are removed if and when a title policy is issued.
Owner's Policy Of Title Insurance
Providing the Best to Homeowners
Homeowners depend upon the strength and stability of a reputable closing attorney and the title insurer he uses , our title insurer back their policies for years to come. They has a long and proud history of providing homeowners with the most innovative title products in the industry.
With our firm, homeowners can enjoy peace of mind knowing they are insured by one of the industry’s premier title insurers. And with the Owner’s Policy, they’ll enjoy even more peace of mind knowing they have the best title policy available.
Providing the Best to Real Estate Professionals
The superior coverage of the Owner’s Policy of Title Insurance, backed by leading best title insurer, provides outstanding benefits to real estate professionals as well. Here’s how:
- Reduces real estate professional 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 real estate professional and client peace of mind in the increasingly complex world of real estate.
Informing clients about premium title insurance such as the Owner’s Policy makes good business sense. With superior title coverage issued through and by a reputable title insurer, real estate professionals and clients benefit from two critical layers of protection.
Superior All-Inclusive Benefits from the Owner’s Policy
This superior policy gives our clients the most thorough and comprehensive coverage available in the industry.
The new Owner’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
The Owner’s Policy also Provides the Following Additional Benefits
- Pre and Post Policy Protections:The Owner’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 Owner’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 Owner’s Policy specifically insures both actual pedestrian and vehicular access, based upon a legal right.
- Restrictive Covenant Violations:The Owner’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 Owner’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 Owner’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 Owner’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 Owner’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 Owner’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 Owner’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 Owner’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 Owner’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 Owner’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 Owner’s Policy Coverage
We can provide you and your clients with information about the Owner’s Policy coverage in simple, easy-to-understand language. We are also available to meet with your clients personally to explain the Owner’s Policy or any other product we offer. Simply request the Owner’s Policy Coverage for your client when opening an escrow. It’s that easy!