| TITLE
101: Quick Answers to
FREQUENTLY
ASKED QUESTIONS
New
Jersey FYI
Title insurance fees are filed and regulated in the State of New
Jersey. Therefore, all title agencies charge the same fees from
agency to agency. When getting a quote from a title agency, besides
the title insurance PREMIUM charge for the POLICY, there are additional
charges such as searches, endorsements, filing and recording fees.
Make sure to ask the title agency you are requesting a quote from
to include ALL anticipated charges in their quote.
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Why
Do I Need Title Insurance?
Real Estate has such great
value that many special laws have been enacted to protect the owner of the property and the heirs of the owner. Also many others
may have rights in the property such as Mortgage and Lien Holders, Municipalities
for Tax Liens, the United States for Federal Tax Liens and the others for Minerals,
Oil or Air Rights. Because of these rights and the bundle of laws protecting the
owners, and others that have an interest in the property, the purchase of real
property must be done carefully and only after an extensive investigation of the
title. Even after an extensive investigation, the only protection against such
things as: errors on the record, missing heirs, mental incompetence of the
seller, marital status, etc. etc. etc., is by the purchase of a Title Insurance Policy.
The following are some of the
issues that must be addressed when
purchasing real property:
- The continuous record of all owners to the property must be searched. This is called a "Chain of Title". If there is any break in the "Chain of Title", the title you obtain may be defective.
- Law suits, judgments and liens against former owners may be a claim against the property, and if not discovered during the search of the title, may have to be paid by you in order to clear the title.
- Unpaid real estate taxes are a first lien on real property and if not paid may result in the loss of your title to the premises.
- Have any former owners granted rights to others? Rights such as easements for a driveway or power line, any right of Access to or across the property. Did a former owner place restrictions on the use of the property? Will the former owner have the right to get the property back if the restrictions are violated?
- A Deed will not answer these questions, an Abstract of the title may not reveal the answer. What protects you against Recorders errors or matters not of record? Only a Title Insurance Policy!
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My present mortgage is covered by a Title Insurance Policy and now I am refinancing, do I need another policy covering the new Mortgage?
Yes, you will need a new policy. The policy on your present mortgage is reduced as the mortgage is paid down. When you refinance and payoff the mortgage, the policy will terminate. You may be entitled to a reduced rate based on the amount remaining on the present mortgage.
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What happens if there is a claim against my property? Do I have to pay for the legal defense in the matter?
No! The Title Company will hire legal counsel, at the company's expense, and take the action it deems appropriate to clear the claim. If the company is not able to correct the problem, your losses will be covered by the policy.
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Defects
in Title
What are the problems that could affect my title?
The following are some of the types of title defect that would adversely
(negatively) affect your property:
- Forged
deeds, mortgages, satisfaction or release of mortgages and other
instruments
- False
impersonation of the true owner of the land or his consort
- Instruments
executed under fabricated or expired power of attorney (death
or insanity of principal)
- Deed
apparently valid but actually delivered after the death of the
- Grantor
or Grantee, or without the consent of Grantor
- Deeds
by persons of an unsound mind
- Deeds
by minors
- Deeds
not properly delivered
- Deeds
which appear to convey title but are really mortgages
- Outstanding
prescriptive rights not of record and not disclosed by survey
- Descriptions
apparently but not actually adequate
- Duress
in execution of instruments
- Failure
to include necessary parties in judicial proceedings
- Federal
estate and gift tax liens
- State
inheritance and gift tax liens
- Errors
in tax records (For example, listing payment against wrong property.)
- Ineffective
waiver of tax liens by tax or other govern authorities repudiated
later by successors
- Corporation
franchise taxes as lien on all corporate assets, notice of which
does not have to be recorded in the local recording office
- Erroneous
reports furnished by tax officials, but not binding on municipality
- Tax
homestead exemptions set aside as fraudulently claimed
- Lack
of capacity of foreign personal representatives and trustees to
act
- Deeds
from non-existent entities
- Interests
arising by deeds to fictitious characters to conceal illegal activities
on the premises
- Deeds
in lieu of foreclosure set aside as being given under duress
- Ulta
vires deed given under falsified corporate resolution
- Conveyances
and proceedings affecting rights of servicemen protected by Soldiers
and Sailors Civil Relief Act
- Federal
condemnation without filing of notice (Federal law does not require
filing of notice of taking in local recording office.)
- Deed
from record owner of land where he has sold property to another
purchaser on unrecorded land contract and the purchaser has taken
possession of premises
- Defective
acknowledgment due to lack of authority of notary. (Acknowledgment
taken before commission or after the expiation of commission.)
- Deed
of property recited to be separate property of Grantor which is
in fact community or joint property
- Lack
of a legal right of access to and from the property
- Matters
affecting title whose origins existed before the period of title
examination and which have not prescribed by operation of law
- Deeds
by persons apparently single but actually married
- Deed
from bigamous couple-prior existing marriage in another jurisdiction
- Undisclosed
divorce of spouse who conveys as sole heir of deceased consort
- Undisclosed
heirs
- Misinterpretation
of wills, deeds and other instruments
- Birth
or adoption of children after date of will
- Children
living at date of will but not mentioned therein
- Discovery
of will of apparent intestate
- Discovery
of later will after probate of first will
- Administration
of estates and probate of wills of persons absent but not deceased
- Conveyance
by heir, devisee or survivor of a joint estate who murdered the
decedent
- Deed
from trustees of purported business trust which is in fact a partnership
or joint stock association
- Deed
of executor under non-intervention will when order of solvency
has been fraudulently procured or entered
- Deed
to or from corporations before incorporation or after surrender
of forfeiture of charter
- Claims
of creditors against property conveyed by heirs or devisees within
prescribed period after owner's death
- Mistakes
in recording legal documents (For example, incorrect indexing,
errors and omissions in transcribing and failure to preserve original
instruments.)
- Record
easement, but erroneous ancient locations of pipe or sewer line
that does not allow route of granted easement
- Special
assessments where they become lien upon passage of resolution
and before recordation or commencement of improvements for which
assessed
- Lack
of jurisdiction of person in judicial proceedings
- And
there are many others...
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How long does it take for the company to issue a Commitment and for me to get to Closing?
We try to allow two weeks in order to get the necessary searches and to do a thorough examination and reading of the title. If we are advised that there is a need to reduce the time, this can be accomplished in most cases. We do everything possible to accommodate the time constraints of our clients.
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2003-2007 Property Transfer Services, Inc. All Rights Reserved.
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