Friday, August 31, 2012
Orlando REALTOR® | September/October 2012
Only a comprehensive examination ensures that title makes the grade
By Grace Anne Glavin. Esq.
Title examination is not just the receipt of a title commitment from an underwriter on the day of closing or just prior to closing. It is the study of the abstract of title and sometimes other title evidence going back usually 30 years. A lawyer or title examiner examines the applicable information to determine who owns the lands, the claims, or defects against the proper ownership and any corrective action needed to secure good record title (sometimes called marketable record title).
Where does the information come from?
An abstract of title is a collection of public records relating to the ownership interest in the real property. Title examination requires not only locating but interpreting numerous deeds, mortgages, wills, court decrees, and other instruments. A lawyer or title examiner considers the sequence of time of transactions and events that affect the title. Then, he or she applies the correct laws and court decisions to the variety of situations disclosed by the applicable title information.
Is the examination difficult?
The examination of title requires a thorough knowledge of many areas of the law, such as the validity and impact of divorce documents, the effectiveness of foreclosures, the scope of restrictions, and the presence of state and federal tax liens have against the property. There are also local Municipal Service Taxing Unit (MSTU) and code enforcement liens to consider.
The examination of title is not just gathering and presenting to the buyer the applicable title documents in a commitment. The buyer is at risk from the relative effect of each of the documents on their prospective purchase. The scope (including duration and priority of liens and encumbrances that will survive the closing) must be fully explained to the buyer so that they can knowingly undertake whatever risk there may be.
The Central Florida Real Estate Council provides this column on real estate law issues as a service to ORRA members to provide a general understanding of the law on various topics of interest, not as a substitute for individual legal consultation, and should not be relied on in specific situations without consulting with a real estate attorney.
Grace Anne Glavin, Esq., is owner of Law Offices of Grace Anne Glavin, P.A., and Morgan Title Company and can be reached at firstname.lastname@example.org. She is also a founding board member of the Central Florida Real Estate Council.