Volume 12 Number 3

 

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Title Tips by Tute
Volume 12, Number 3

 

Dear Tute:

            I was asked to update a title I had done a while back and the underwriter gave me a copy of the commitment to show where I was to begin.  That binder didn’t look anything like the report I prepared.  What do the underwriters do with our title work when it gets back to the office?

                                                                        Search Me

 

Dear Cognostor Ordinarius: 

            Title examination and underwriting are half mechanical process, half historical treasure hunting, half alchemy and half intuition.  On many searches, you can get by using only the first half, but every once in a while, you’ll need to dip into the other three halves of your arsenal for the tools to do the job. 

            Having wandered back and forth across the line between examining and underwriting a few times, and having reviewed more than a few title reports, the first thing I suspect the underwriter did was read your report, the documents you reported, and especially if those didn’t mesh, your title notes.  Can I just tell you that what goes on the front sheet doesn’t always look like the supporting materials behind it?  Just this week, I looked at a report where the front sheet said title was vested in “A” but the source deed said the grantee was “B.”  Easements were reported that didn’t affect the property, and the computer generated adverse list showed the parcel’s “GPIN” next to several easements that were not reported.  Many years ago a claim story circulated about an unreleased deed of trust.  It wasn’t the parcel on page one that was unreleased; it was the several additional parcels on the attached exhibit.  The original examiner (and subsequent examiners, as well) apparently never read the entire document.  (And betraying one’s age, that was when the documents were in books, and all you had to do was turn the page; not nearly so easy to do today on a computer terminal!)

            One might think the examiner just had a bad hair day . . . but this does not seem to be an isolated occurrence.  In earlier columns, your humble expositor commented on some of the distinctions between a searcher and an examiner . . . (shameless plug for self – if you haven’t saved every issue of the VLTA Examiner so you could immediately turn to Volumes 3, 7 and 8, you may find copies of earlier columns on my website – http://www.tute.us/Tute_articles.html).  If there is one single characteristic that distinguishes the examiner from the searcher, it might well be that the examiner reads the documents found during the title examination.

                                           Tute

 

Dear Cognostor Aspirarius: 

            How can you make your initial report look more like the end result the underwriters send you?  If you are taking the time to read the instruments, and the exhibits, and the ancillary documents referenced on, and often incorporated by reference in, the documents you found, then your report will look more like the end product given back to you by the underwriter in the office.  There is an ecclesial image that comes to mind: every member of a church has certain talents they bring to their community, certain contributions they make to the well-being of the whole body.  The eyes can’t do the same job as the feet, but when both work together; the body doesn’t walk into walls nearly as often.

            In addition to being the eyes of the title company in the record room, the examiner is also a portion of the brain.  They remember all sorts of things:  a really sweet title where all the pieces came together; a real dog where every strand unraveled; a company training seminar; a claim they were asked to review; a history course that said a battle was fought in the county during the Civil War; Tute’s old columns in the VLTA Examiner; an old house down the street with a “George Washington slept here” plaque on the door.  Not all those memories are in the forefront of your consciousness when doing a title; but may float into your conscious thoughts when a document sets off the mental “trigger.”  The examiner doesn’t push those thoughts back into their subconscious; but reviews them to ask, “Why is that memory surfacing now?”

            Most of you have seen foreclosure deeds and deeds in lieu of foreclosure.  How many of you have seen a petition to invalidate a deed in lieu of foreclosure?  A re-recorded deed of trust to reinstate a lien? Have you ever wondered how the lien of a deed of trust could be released without the lender’s signature accepting the deed “in lieu” of foreclosing on its security interest?  Have you ever wondered if a certificate of satisfaction that released the original deed of trust, but not the amendment increasing the debt, could release the amendment too?  Or if a sat releasing a modification, but not the original, could be an effective release of the original?

            Most of you have examined the title to properties bounded by water; be it the Atlantic Ocean, the Chesapeake Bay, a river, stream or lake.  Have you ever wondered where the boundary between Virginia and Maryland is located within the Potomac River?  Did you know that some rivers were designated public rights of way by the General Assembly?  Have you ever wondered if there is a different rule for man-made lakes and spring-fed lakes?  Have you ever wondered whether the mean high water line is always the same, and how surveyors figure out where it is?  Have you ever wondered why the title policy takes exception to title below the high water line?  Is that the high water line before or after the owner extended the shoreline by building a bulkhead and filling in the gap?  Have you ever marveled at the difference between accretion and avulsion?  Did you know there was a difference?  What about those ubiquitous drainage ditches that run along the highways and between properties – who gets to use those and who has to maintain them?

            Most of you have examined titles where the land was owned by a corporation or partnership.  Why have churches held title using trustees, rather than in their own name?  Why have other churches held title through their bishop?  Why can’t a trust hold title?  What’s the difference between a revocable trust, a testamentary trust, a business trust and a land trust – or is there any difference?

            Many of the boundaries to properties whose titles are examined today are described by reference to a subdivision plat.  Was the subdivision plat really recorded?  What did you do if it wasn’t?  Is the description any good?  Was it amended to renumber the lots or change the boundaries?  What if the deeds didn’t reflect the amendment?  Is the description still good?  How many of you have looked for, or at acreage plats from before the subdivision?  What did you see?  Did you report the things you saw?  Does it matter if there is going to be a survey exception in the policy?  Does it matter if the policy form is going to give survey coverage regardless of whether or not there is a current survey? 

            One of the mottos of the claims department may well be – or should be – “There is never enough time to do it right, but always enough time to do it over.”  When an examiner turns in their report, the guy doing it over isn’t going to find anything else (absent documents mis-indexed, not indexed or not recorded at the time of the first exam).  If a searcher did the report, you may not even recognize the results as being for the same property.  Think about it – which would you rather be?

                                           Tute

 

 

 

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