Title company refuses to insure tract due to boundary issue
Q : I bought a tract of land several years ago and am now hoping to resell. The title company says I have a boundary conflict with a neighbor and they can’t insure it. The old title company says they don’t guarantee boundaries and that I have no coverage for this conflict. The surveyor said “oops, I may have messed this up”. Where do I go from here?
A : First, assess the damage and the amount of the conflict. It may not be worth fighting over. Title companies do not guarantee boundaries unless you ask for it and you pay an additional premium for the coverage. A lot of people don’t know this, but it is addressed in paragraph 6.A. (8) of the TREC residential contract form. Then talk to your neighbor to see if you can resolve the disputed area. File a complaint with the Texas Board of Professional Land Surveying in Austin. This guy owes you some money for your damages.
Q : I’m ready to close on the sale of my home. My wife will be out of town and wants to give me a durable power of attorney to sign for her. The title company won’t accept it. Don’t they have to?
A : In a word, no. Where will your wife be? Almost no one is so far away that they can’t sign a document in front of a notary public. We have encountered situations where the spouse has signed with a power of attorney, accepted the sales proceeds, and the other spouse (having coffee at home) never knew the sale took place. Title companies don’t like that kind of risk. A new statute regarding durable powers of attorney was just passed by this legislature. New procedures are coming.
Q : I’m trying to buy a property owned by a church. Who can sign for the church so I know I have a binding contract?
A : What a can of worms. It depends on the church’s organization. Catholics take title in the name of the bishop of the diocese, Mormons have a corporation that takes title to all of its assets, the Baptists are separate, and generally have a Board of Trustees. Some small churches have no structure. It can vary all over the place, so you just have to inquire. The good news is that the title company guarantees the capacity of the party signing, so you at least have title insurance coverage for incapacity of the signing party.
Q : I am a real estate agent and have listed a house for sale. There was a murder and suicide in the premises. Which do I have to disclose?
A : How would you feel if you bought a house and the neighbors ran over to explain to you the things that occurred in that house? There is a statute that says you don’t have to disclose suicides.
The rule is not so clear about murders. Most will tell you to disclose the murder as a material fact. Some say that if the decedent was shot in the house, but died at the hospital, it doesn’t need to be disclosed. Our suggestion is to disclose everything. If the buyer doesn’t care (and some don’t), sign them up. If they react adversely, you may have saved yourself a law suit. When in doubt, disclose.
To send a question visit www.AskGeorge.net and select the “Ask A Question” button. Our answers to questions do not contain legal advice. If you wish to obtain legal advice, you should consult your own attorney. George Stephens is the broker of Stephens Properties. Charles J. Jacobus, J.D. is Board Certified by the Texas Board of Legal Specialization in Residential and Commercial Real Estate Law.