What Does A Title Company Do?

 

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What does a title company do? Well, a title company issues title insurance. In incident to or as a result of issuing title insurance they must prepare all the necessary documents to convey title. Title insurance is where the title has been examined by looking at the records, and then once they’ve examined it they determine if there’s any liens or any encumbrances such as easements, or restrictions, or judgments. Most people are very concerned about getting a clear title. Clear title means, to most people, that there are no judgment liens against the property or other kinds of liens.

The title company, through their underwriter, has the title examined. Once they have the title examined they issue what they call a title commitment. It says that we will insure the title to so and so, which is usually someone who is buying the property under a contract. If Mr. and Mrs. Jones are buying a piece of property or have a contract to purchase it for say $100,000, the title commitment would read, “To John Jones and Mary Jones.” It would show that it would be issued for $100,000. It would commit to issue a title insurance policy free of any particular liens against the property. The first page would indicate the amount and then they would show the legal description. The second page is called Schedule B1 on the commitment. It would outline what would be necessary in order to have the title insurance issued. First off it would say that you got to pay the money. Secondly it’s going to say that you need a deed from the present owner to whoever is purchasing it, to Mr. and Mrs. Jones.

Then the other requirements may require that the existing mortgage be paid off out of the, from the closing before they could issue a title policy. It would also say that we may need to give them an [Estopple 00:02:26], or a statement from a Homeowner’s Association or Associations to see if there’s any unpaid Association dues. If there’s any judgments outstanding they would say that these judgments need to be paid for us to issue a title policy. If the property is in the name of a descendant, the title commitment under Schedule B1 would call for a probate proceeding. Schedule B1 are all the requirements that must be fulfilled in order to issue a title policy.

Then you turn to Schedule B2. That’s a schedule of encumbrances that you will receive the policy, such as various restrictive covenants, particularly if you’re buying a condominium and will have the entire condominium. If you’re buying through a Homeowner’s Association it’ll say what the restrictive covenants are and reference them as where they’re recorded in the public records. Usually a closing, as far as a residential closing, where someone’s buying a house, they’ll delete what they call Tute Standard Exceptions. One is rights of claims of parties in possession because the buyers will be getting the keys at closing. The other one that is deleted often is if you delete the unrecorded liens. In Florida, anybody provides material or services to a particular property has 90 days in which to file their claim of lien. It will insure against unrecorded liens that have occurred in the last 90 days.

Once all the requirements have been satisfied and everything’s been signed, the title company then takes the money from the closing that they get from the buyer, then they pay off the mortgages, they pay whatever they need to to satisfy all the requirements under schedule B1 of the title insurance. Then they will issue the title policy. The title policy then insures the buyer, Mr. and Mrs. Jones who purchased the property, that they have what they call “marketable title” to the property, meaning that there are no outstanding liens against the property or there’s no encumbrances, or easements, or restrictions unless they were shown in the schedule which was referred to in the commitment as Schedule B2.

What does a title company do? A title company issues title insurance. They usually also, are usually the closing agent, meaning that they’re the ones that handle the money and prepare all the documents necessary in order to have the title insured. They’re authorized to do that. I’m a title agent. I’m an attorney title agent, so I issue title insurance. If you come to my closing in my office, and I try to be at the closings, I try and explain any of the exceptions, or try and talk to you about your title insurance policy and show exactly what the exceptions are such as restrictive covenants. If you’re selling your real estate, and I compete with other title companies as far as price is concerned, and believe that we provide good quality service, timely service, and you also get the benefit of me throwing [kabitzing 00:06:10] as far as what the law is, or explaining certain things at the closing table.

If you sell your property and you need a title agent, or you want me to close a transaction, you merely need to tell your realtor that you would like to see how much it would cost for the Law Office of Waller and Mitchell to be your title insurance agent, and close your transaction. You don’t necessarily need to pay me an attorney fee, but I’ll just close the transaction as a title agent and closing agent for the title insurance premium. When you sell your house, well give me a call at 727-847-2288 and I’ll be glad to write the title insurance for you, and also answer any questions. Thank you for calling.

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Can I Trigger Ineligibility For Medicaid Coverage For Skilled Nursing?

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Can I trigger ineligibility for Medicaid coverage for skilled nursing care once I’ve already been approved for Medicaid coverage? The answer to that question is an emphatic absolutely. Let me give you an example. I had a client of mine today asked me a question regarding the sale of a vehicle. The situation, this gentleman was already approved for Medicaid, was already in the skilled nursing facility and Medicaid had already been paying for skilled nursing care for several months. He was in a position where he had a vehicle. That vehicle he was obviously getting no use out of because he was in skilled nursing care and could not drive, so his daughter wanted to know if it would be a possibility that he could either sell the vehicle or give the vehicle to her.

That sort of situation you absolutely would not want to do anything with the vehicle. Not sell the vehicle or give it away. The reason being is that Medicaid eligibility is reviewed on an ongoing basis. This specific situation, if he gave the vehicle to his daughter he would be looking at a period of ineligibility based upon the value of the vehicle because it would be considered a gift, a transfer of assets for less than value. What if you sold the vehicle? That wouldn’t be considered a gift. Well know it wouldn’t but in that sort of situation, the money that he would receive as a result of the sale of the vehicle in this situation $20,000 would also trigger ineligibility for Medicaid coverage due to the fact that he would now be over the above threshold which is $2,000 which would then make him ineligible for Medicaid coverage.

In this specific situation, what you would do is you keep the vehicle. You can store it, hopefully at a relative or a family member’s house, free of charge and then the vehicle will still have it’s exempt characteristic and will not be counted against you for Medicaid coverage purposes, but you also are sure that your vehicle is secure. These are just some things that you want to think about once you’ve already received approval for Medicaid coverage because the Department of Children and Families is allowed to continually review financials at least for one year from the period of eligibility all the way through the review period after that initial year. Keep this in mind.

If you have any other questions regarding Medicaid approval, Medicaid planning or the actual Medicaid application, please give us a call here at Waller & Mitchell at 727-847-2288.

 

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What Types Of Things Must I Disclose When I’m Selling My House?

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What types of things must I disclose whenever I’m selling my home? Well this emanates from a case that’s probably twenty-five-years-old called Johnson versus Davis. The Supreme Court came down on selling your home, or your residential property, that says that a seller must disclose to a buyer any matters that may materially affect the value of the property that are not readily observable. This provision has also been carried over into the present contract that has been approved by The Board of Realtors in the Florida Bar. It provides precisely what I have said.

What falls into that category? Well certainly if you have a leaky roof, you can’t very well not tell them about it. If you have a fire or a flood and then you’ve taken care of it, you need to disclose that the property has previously flooded. Things such as that. It gets into a more grey area whenever, let’s say, that someone has died in the home. Certainly if it’s coming out of an estate, well that’s fairly apparent. I don’t know that that’s a matter that may materially affect the value of a property.

Well take it one step further. What happens if someone was murdered in the home, or some crime was committed, or is was a grow house? Well those matters maybe something that could materially affect the value of a property. Another matter is what if you know that your neighbor had sinkhole? Now are you required to disclose that your neighbor had a sinkhole on his property although you haven’t experienced any sinkholes? There’s any number of grey areas that come into being or of what you need to disclose.

The realtors have a fairly comprehensive sheet that they go through for each component of your home, such as the plumbing, the electrical, all of the disclosure sheet, and so that should be a pretty good guide as far as completing that as to whenever you sell your home. Go through that disclosure to let them know how long it’s been since you’ve redone the roof, whether you’ve experienced leaks, things such as that.

The best thing to do however, if you’re going to buy a home, is to have your own inspection done. But that’s not the question you wanted to know. From a seller’s perspective, what you needed to disclose. I always recommend the sellers to air on the side of more disclosure rather than less so that you don’t have to worry about it coming back to haunt you later on. When in doubt, I’d go ahead and disclose the matter to the buyer. If they like your home, and it’s in good shape, and there’s no really other problems, it’s not going to keep them from buying the house. If they wind up buying the house and later on have seller’s remorse, or some other reason that they wanted to get out of the house, or bring a lawsuit against you, that you’ve made the disclosure and you’ve taken away that reason for them to try and come after you for failure to disclose.

The buyer’s remedies for a seller failure to disclose is if they can bring an action within one year it’s called “rescission,” which means that you turn around and you offer to convey the property back to the seller, and in turn you receive your money. This is a difficult remedy; sometimes you’ve paid off mortgages, that the seller doesn’t have the money, that you have a mortgage that you have to pay off, or you’ve made substantial improvements, so there’s any number of problems.

The other aspect of it, if that remedy is not feasible, is to sue for whatever the cost to repair is or to correct the problem. That is your other remedy. Of course, before you have a good lawsuit with that, you need to make sure that whoever you’re suing has the money to pay. That’s another aspect of looking at it. This obligation to disclose not only extends to a seller, but also to realtors that if they know of any information they must disclose it to the buyer or make the disclosure.

There is another problem as far as buyers are concerned if they wish to bring an action against the seller: they have show they the seller knew of the problem. Many times you see whenever you’re buying bank-owned property, there’s a big disclosure saying they’ve never occupied the property and therefore do not know if there are any problems with it. That’s a discussion as far was what needs to be disclosed, and certainly a grey area.

If you have any questions, well give me a call at 727-847-2288.

Thank you.

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How Often Should I Update My Estate Planning?

 

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How often should I update my estate planning? I have a pad answer on that is is that whenever you’re circumstances change or the law changes. I suggest that once you do your estate planning, that you put it someplace where you look at it approximately once a year just to look to see if that’s still what you want. Whether there’s been some change or circumstance such as losing a loved one or beneficiary that you’ve named in your will. You may want to make some changes far as that’s concerned.

 

Certainly if you have… You’re married and you lose your spouse, it is very important to come in and do your estate planning. Look at your estate planning to revise or to simplify your estate plan. With estate plans, folks usually want to know two things from the very beginning. One is are there any estate taxes, which unless you have a lot of money, there aren’t any estate taxes. If your estates less than five million dollars and that’s as far as the federal governments concern. The state of Florida’s done away with estate taxes so you have… You don’t have any estate taxes in Florida or with the federal government. However, if you have estate property outside the state of Florida, then there may be estate tax whatever state that that property is situated in.

 

The other issue is trying to avoid probate, which is really a… Something you can do particularly if you’re married on how to title your assets to try and avoid going through probate. Some circumstances if you’re by yourself then a trust is appropriate or if you’re married possibly 2 trusts are in order. However, most simple estates can be handled without that, but that’s another objective.

 

Also we need to, or I try to, keep my clients up to date as the changes in the law and the other estate planning documents beside will and a trust are your living will, which says that you don’t want your life to be prolonged unofficially or a healthcare power of attorney called a healthcare surrogate designation. That was changed just recently in the last couple of years and so I would suggest that you might wanna to contact your attorney or call me to see about getting your healthcare surrogate updated to comply with the new law. Not that the old one wouldn’t work, but this new one would be… Works a lot better.

 

Also your power of attorney form and that law changed three or four years ago and its been enhanced. The power of attorney would be a good idea to review and to update it and that you can have some other called superpowers. One of the things that just passed in legislature where you might want to update all your estate planning documents is your digital assets. When you pass away, you may have something of value such as owning domains, any sort of an accounts, but if you don’t… If your personal representative doesn’t have your passwords and then Google and these other folks, they’re not gonna give you access or give anybody access unless you have specific authority to be able to access their accounts. That act has just passed and so all your estate planning documents need to be revised to include the authority to access your digital assets. We saw that problem with the FBI trying to get into a cellphone and the Google, or whoever it was, would not let them in. You know because of privacy.

 

This has been addressed in legislation however, you do need to put that specific power in your estate planning documents. Give me a call if you’d like to update your estate planning documents and I’ll be happy to help you. My phone numbers 727-847-2288.

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What Is Title Insurance And Why Is It Necessary?

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What is title insurance and why is it necessary? Title insurance is an insurance policy that ensures that you have marketable title to the property. Like any good insurance policy, it shows the amount of coverage that you have, so if you have a complete title failure or partial title failure, it’ll pay up to the dollar amount that’s shown on schedule A of your title insurance policy.

It also tells you the title to the property and has the legal description of the property on schedule A. There is a schedule B that says that there are certain matters that they don’t insure against which are called exceptions. Some of these exceptions reference such as easements, restrictive covenants, and conditions, those are just a few examples, which are usually acceptable to a buyer. What you need to be concerned about on your Schedule B of your title policy, is if there is a judgement or some sort of lien that’s shown in that, which you’re not insuring against.

That’s what title insurance does. It insures that you have marketable title, and if you’re notified that there is a lien against your property or another problem with the title, that you have someone to look at. The big reason why title insurance is necessary is more for preventative measure than it is a remedial measure. That then, you have someone who has examined the title to check to see if there’s any particular liens against the property, and so they are confident or have examined the title, and therefore will insure it, so that they, as they say, put their money where their mouth is, or the insurance policy itself.

Whenever you make a substantial investment, of hundreds of thousands of dollars, or one of the largest investments that you make, you’re usually not talking about a few hundred dollars, you’re talking about thousands of dollars. It would only be appropriate that you make sure that you know what you’re getting, and have the title searched, and have a title policy. This, in the Tampa Bay area, whenever you purchase real estate, the seller is usually the one that is responsible for paying the title insurance, that’s primary practice, and that’s shown in the real estate contracts, as to who is to pay for the title insurance.

If you go down to Miami and Broward county, and those counties, there the borrower is the one that’s responsible for paying the title insurance. It varies throughout the state as who’s responsible, and is controlled by contract. There’s also an aspect of it is that if you have … if the seller is paying for owner’s policy, and the buyer is getting a mortgage, the buyer can obtain what they call a simultaneous issue rate, to ensure your lender that the lender’s getting a first lien on the title, and that there’s no junior liens. The title insurance is important to the lending community, to make sure that they have first liens, and not just rely on an attorney’s opinion or an ownership and encumbered search, an attorney’s opinion, because, let’s say that the lawyer missed something or the title company or whoever issues the ownership and encumbered search missed something. Who they going to hold responsible? Go back to the lawyer, does the lawyer have the ability to pay the money, is he still in business, has he died or whatever. Therefore, we have the advent of title insurance, which has been around for longer than I’ve been … I’m not sure just how long, but it’s been here a long time, 50, 60, 70 years.

You have any number of major title insurance underwriters. It’s primarily preventative, because you do thousands of transactions and the property sells and resells and there’s no title problems, but you’re checking on them, such as code enforcement liens, should show up on a title search, and that way you take care of it before you take title. Otherwise, if you just take a deed to the property and trust the seller that he says, “Oh, no, I don’t have any liens against it.” Later on, you find out, what are you going to do about it? That’s the reason why you want to have title insurance and hopefully give you some idea of what title insurance does.

 

If you have any questions, or more importantly, if you like for me to write some title insurance or write a contract and write the title insurance policy, I’ll be happy to do so, give me a call at 727-847-2288.

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