Volume 7 Number 2
Title Tips by Tute
Volume 7, Number 2
Lamentably, no unique or novel questions were forwarded from the editor in time for this issue. As a result, Tute is forced to assume everyone is too busy handling mundane day-to-day business (nine rate cuts in 10 months does tend to cut into one's free time) to forward more esoteric concerns. This does present an opening, an opportunity if you will, to review some basic issues that go to the very existence of the title examiner. Those with a journalism background may remember that certain basic questions need to be addressed in every news article - who, what, where, when, why and how - in order to induce the reader to continue to read, and not to buy the publication solely for the purpose of lining their pet's living quarters. In this issue, Tute will try to show where the examiner fits into the real estate transaction and the preparation of the title insurance policy. I am deeply indebted to LandAmerica Financial Group for providing me with a CD copy of SingleSourceTM v. 1.2 , portions of which I have shamelessly plagiarized.1 I make no attempt to instruct the reader in the mechanical tasks of examination today; rather, I attempt to address the underlying question of why there are title examiners at all. (If Tute must wax philosophic, it is with the recognition that Bill Cosby's discussion of the innate superiority of Physical Education majors over Philosophy majors in his routine "Why Is There Air" says it all so much better than I can.) Mechanical discussions are reserved for future issues. Tute specifically will not address any perceived distinctions between "searchers" and "examiners," leaving that to the conscience of the reader.
Searching is a technical skill. It is the process where an individual, called a searcher, systematically researches the history of title and gathers information on a specific parcel of property. Some of the key attributes of a good searcher include accuracy, comprehension, and the ability to efficiently gather information in the least amount of time necessary.
Examining is also a technical skill. The examiner reviews the documentation from the title search (and may review the search procedures, as well). This review includes closely inspecting each document in the chain of title for sufficiency, and determining its role in the overall title history of the property. The ultimate concern of the examiner is how all of these documents relate to our issuance of title insurance.
Accuracy: The searcher's task is to obtain all the appropriate information relative to the title to the property to be insured. Failure to obtain the correct information or all of the information has serious ramifications. At a minimum, additional work is required later to complete the search. This is time-consuming. Customers may be inconvenienced, and customer relationships may be strained. The reputation of the company may suffer. Even worse is that missed, incorrect, or incomplete information may result in a claim against the policy - a claim that, by its nature, was preventable. Accuracy is critical.
For an examiner, accuracy relates to the consistent and complete review of the documentation. Among the many things an examiner may check are the names, signatures, and notary acknowledgement on documents; the succession of title; the interests or rights created by certain documents; and the impact of terms, conditions, or provisions contained in documents. It is essential that the examiner accurately and correctly assess each document. A "simple oversight" can become a devastating claim.
Comprehension: The understanding of the history of the specific title and the documents in the chain of title is essential. It is that understanding which always directs the next step in the search process. Some searches can be relatively simple, while others are very complex. This is particularly true when searching multiple parcels, properties with multiple owners in title or with frequent changes in ownership, or properties with complex legal descriptions. Also, some documents, which, at first glance, appear to be simple, can give the searcher clues to other matters that need to be investigated. If you, as a searcher, don't completely understand the search you are working on, how can you be certain that you have discovered all the pertinent information?
An examiner must fully understand the search process. Only then can he/she be certain that he/she has the complete and appropriate information to examine. The examiner must have complete comprehension of the documents being examined and the ways they interact. And, very importantly, the examiner must understand the ways in which transactions are structured; from the typical to the creative.
Valuable clues to the condition of title come from the comprehension of all facets of title searching, documents, and their interrelationship. Misreading these clues, or not fully understanding the substance of the exam, can lead to claims against the policy.
The examining procedures expand upon the searching procedures. Many of the basic areas of consideration for searching and examining are the same. When examining, your focus changes. Some areas become matters of review, while others will be expanded upon. The focus of an examiner is to:
For an examiner there are additional concerns. While every transaction contains its own peculiarities, these concerns, in general terms are:
The examination of title, which results in taking proper exception to matters against which we are not willing to insure, is the concern of the examiner. Exceptions ambiguously or incorrectly worded can lead to claims, just as though no exception had been made.
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