Ti­tle News

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When you re­ceive your com­mit­ment, ver­ify the pro­posed in­sured on the sched­ule A. It may be you or an­other des­ig­na­tion. Look for the con­tract sales price and com­pare the loan amount to your con­tract. If it is all cash then no need to worry about the loan amount. The boxes should be checked for an owner’s ti­tle in­sur­ance pol­icy and loan pol­icy, if not pay­ing cash. Check the es­tate or in­ter­est in the land de­scribed and re­ferred to in the com­mit­ment (fee, lease­hold, etc.). Look for a date and time. Look at the land de­scrip­tion. It should not be an ad­dress; it should be a com­plete legal de­scrip­tion. If th­ese items do not ap­pear on your com­mit­ment Sched­ule A, you should ask your at­tor­ney, Re­al­tor, and es­crow agent why they are not there.

There are spe­cific ti­tle com­mit­ment is­sues:

Ease­ments: An ease­ment gives per­sons other than the owner ac­cess to or a rightof-way over the home­owner’s prop­erty. Ease­ments should be con­sid­ered, espe- cially if the buyer is con­sid­er­ing changes such as im­prove­ments and use.

CC&R’s and other deed re­stric­tions: The dec­la­ra­tion of covenants, con­di­tions and re­stric­tions for a home­owner’s as­so­ci­a­tion is recorded against the prop­erty. CC&Rs can be en­forced by an as­so­ci­a­tion, or it may be en­forced by the other home­own­ers. As a buyer, you should care­fully read the CC&Rs and any other doc­u­ments af­fect­ing the prop­erty and us­age.

Ac­cess: Fail­ure of the public records to dis­close a right of ac­cess to the prop­erty will be noted in the com­mit­ment. Land­locked prop­erty may be sold. The lack of ac­cess must be dis­closed to the buyer.

Mil­i­tary air­ports: Buy­ers in the vicin­ity of a mil­i­tary air­port will ap­pear on the com­mit­ment.

Judg­ments: A recorded judg­ment is a lien on all real prop­erty. A judg­ment lien against the seller usu­ally must be paid prior to the es­crow closing.

Bank­ruptcy: If the seller has filed bank­ruptcy, the bank­ruptcy trustee will have to ap­prove the sale be­fore es­crow closing. A court or­der may be nec­es­sary. Be pre­pared for the time in­volved.

Liens: There are nu­mer­ous types of liens that may need to be paid and re­leased be­fore the es­crow closing. Th­ese liens may in­clude state and fed­eral tax liens. In a fed­eral tax lien the gov­ern­ment es­tab­lishes its in­ter­est in the prop­erty and any prop­erty ac­quired af­ter the lien is filed.

Endorsements: In ad­di­tion to the cov­er­age avail­able un­der the ti­tle in­sur­ance, ad­di­tional cov­er­age can be ob­tained through endorsements. You should ask for ev­ery­thing that is avail­able. Then make a de­ci­sion af­ter the ex­pla­na­tion for the prod­ucts that fit. If they can­not ex­plain, or if they say, “There are no ad­di­tional prod­ucts” then find some­one who can re­ally help you.

Ti­tle In­sur­ance Pol­icy: The ti­tle in­sur­ance pol­icy is is­sued af­ter record­ing. The ti­tle in­sur­ance pol­icy does not in­sure that a ti­tle de­fect will not oc­cur; it in­sures that if a ti­tle de­fect oc­curred prior to the pol­icy date; the buyer will be in­dem­ni­fied if the de­fect can­not be cured.

It is ex­tremely im­por­tant to read the com­mit­ment com­pletely. Con­sult with your at­tor­ney. It may be the best money you spend for a life­time of com­fort.

Otis Phillips has been in the ti­tle busi­ness since 1978 and has served as an in­de­pen­dent ti­tle agent, in di­rect of­fice man­age­ment, and in the un­der­writer arena in 14 states. Con­tact him at nmabop1@ya­hoo.com or 505.577.3601.

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