 | Jeff Otto is Branch Manager of Lawyers Title Insurance Corporation which is a member of LandAmerica Financial Group, Inc., a premier national provider of title insurance and settlement services. Lawyers Title has been in the local marketplace since 1955. Jeff has been with Lawyers Title for 34 years, the last 24 right here in Wichita. You may contact Jeff at (316) 682-9600 x 201 or by e-mail at jotto@landam.com |
Real Estate
2005-09-01 07:39:00
What if the title is not clear?
ANSWER: If the title to the property is not clear, there may be a number of remedies: a) The current owner may have to pay a lien, judgment, etc. in order to clear the title for sale to anyone else. b) If the current owner has an Owner's Title Policy, and the defect in title was prior to the current owner obtaining the property, the issuing agent can request of the issuing Underwriter, an Indemnification of the backtitle and the new title agent/underwriter can then insure over the defect. Example: A 20 year old mortgage shows of record. The bank has gone out of business so no Satisfaction of Mortgage can be issued. The current insurer gathered sufficient information to underwrite the lien without needing the Satisfaction filed, but this also means it will stay of record indefinitely, always being a lien against the property. The new title insurer takes the Indemnification from the current title insurer so that the lien can be insured against by the new title insurer. c) Escrows may be collected at closing and held by the title agency until the defect can be remedied. d) The property may be deemed un-insurable by the title agency and there is no remedy for the defect, making the property "un-sellable" e) The buyer may elect to accept the defect (depending on what it is) with the seller adjusting the sales price accordingly. As you can see, the Title Insurance policy is a very important part of the sale or purchase of real property. Never let yourself get involved in a sale or purchase without it. That's a mistake that could haunt you for a long, long time. More next month…
