A senior escrow officer at one of our sister companies recently purchased an investment property for all-cash with her brother. After closing, they renovated the property and found tenants who would sign a long-term lease. Six months later, the property was foreclosed upon by Bank of America and the escrow officer and her brother almost lost their investment!
Fortunately for the escrow officer and her brother, they purchased title insurance at closing. They immediately notified the claims department of their loss. The claims officer began researching how the buyers could have lost the property to foreclosure when they had not mortgaged the property in the first place.
A Shell Game Indeed… What he found was shocking. In 2010 the original owners fell on hard times and stopped making payments to Bank of America on both their mortgage and Home Equity Line of Credit (HELOC) as evidenced by more than one recorded Notice of Default in public records. Shortly thereafter the owners recorded a Substitution of Trustee and Deed of Reconveyance for each loan. These documents purportedly released the two Bank of America loans. They were supposedly signed by an authorized representative of BAC Home Loan Servicing, LP, but were not signed in the home office of Bank of America. Instead these two releases were signed, according to the notary, in Placer County, Calif.
Next, the property owners deeded their (now free and clear) piece of property to a company, called Atlus Equity, LLC, which subsequently listed and sold the property to our escrow officer and her brother for $190,000. The tenants living in the property received Notice of Trustee’s Sale and stopped making their monthly rent payments to save for an impending move once the foreclosure occurred.
“The claims department is standing by to write the check to Bank of America in exchange for their deed.”
In the meantime, the escrow officer and her brother have been working with the claims officer to settle with Bank of America to deed the property back to them. The Trustee’s Deed Upon Sale states the bank is due $189,000. The claims department is standing by to write the check to Bank of America in exchange for their deed.
Sadly, after a search in the claims system, we have discovered this same scam has been pulled by the same individuals at least five times leading up to this claim.
Moral Of The Story
There are specific elements that we are cautious of when examining title for free and clear property. Specifically, we investigate the event that led to mortgages being paid in full and review recorded lien releases and investigate their authenticity if they appear to be executed outside of the main lender office.
What do you think? Is title insurance worth it? Please share your thoughts by commenting below.
A domestic partnership is a legal relationship between two adults who are not married. The status confers many of the rights and benefits also available to married couples in many aspects of life but it is not marriage under Washington law. Originally only a few of these affected real property, but as of 2008 many elements of real property ownership applicable to married persons now also apply to domestic partnerships.
1. Who qualifies for domestic partnership?
Domestic partnerships can apply to persons of the same sex, but also to those of the opposite sex where at least one of them is 62 years old or older. This is important to those who want some of the benefits of marriage but who do not want to be married. For instance, a domestic partnership will allow inheritance of a home as if the couple were married, but preserve the single status of those persons who do not want the relationship to affect, for example, pensions or Social Security benefits. For those couples it is important that the legal relationship not be equivalent to marriage.
“Domestic partnerships can apply to persons of the same sex, but also to those of the opposite sex where at least one of them is 62 years old or older.”
2. How do domestic partnerships effect real estate ownership?
Broadening the treatment of real property to apply to domestic partnerships means that now interest in real property is equivalent to both homestead and community property for a married couple. (Please see previous post on community property & homesteads in WA by clicking here.) And, of course, if either partner dies without a will, title to real property will be treated the same as for a married couple in similar circumstances. (Please see May 2011 post regarding probates.)
3. How can I have a domestic partnership legally recognized?
In order for the domestic partnership to be legally recognized in Washington State a declaration of domestic partnership must be completed and filed with the Office of the Secretary of State, Corporations Division. It can be terminated automatically if the partners marry each other as recognized in Washington (which would only apply to domestic partners of the opposite sex). It can also be terminated voluntarily by filing a notice and affidavit with the registry and meeting certain other criteria. The final way it can be dissolved is by a court process similar to marriage dissolution.
4. Will Washington State recognize a same-sex marriage registered in another state?
Limited reciprocity rules apply to domestic partnerships. A legal union formed in another state that is “substantially equivalent” to a Washington domestic partnership will be recognized here as such. However, a same-sex marriage that is legal in another state is not recognized in Washington as either a marriage or a domestic partnership.
The Realtor® has a great listing – it’s beautiful beachfront property. But, the buyer wants to know what she actually gets for the premium price. Is the beach hers? Can anyone else walk along the beach in front of her house? Can she put in a dock for her boat? If the beach starts to erode can she put it something to stop it? Will the title company guarantee her rights to the beach?
Tip: Click the keyword links in this post to view the definition of the keyword (i.e. click on: navigable waters). Click the link again to hide the definition.
There are three main areas of concern to the buyer
The first is title – that is, who owns the beach?
The second is the location of the boundaries – how far out does the owner’s title extend, where is the boundary between the upland and the beach, and does the upland boundary extend straight out into the water?
The third is use – what can the owner or others do on the beach or the water?
Navigable Waters
Unless previously deeded by the federal government, the beds of all navigable waters became vested in the State of Washington at statehood. So, the upland owner has title to the beach only if there is a deed from the state – which would have been early on because the state no longer can convey such land except in limited circumstances. And, navigability is a technical question, and is based on navigability in 1889 – not today! Title companies generally assume most bodies of water are navigable, and so won’t specifically insure title to beach area unless it is satisfied there is a good title by deed from the State or the US. Tidal waters (the ocean, Puget Sound and the mouths of some rivers) are navigable, but lakes and streams might or might not be.
These waterfront issues are complicated, and the Realtor® should never assume anything about who owns what and what rights the upland owner has to use or control use of the beach.
Who owns the beach?
On navigable waters on Puget Sound, the title company will only insure land that was deeded by the State. But for non-navigable lakes or streams all upland owners would own not only the “beach” but also the submerged land out to the center. But then, where is the location of the side boundaries that extend out into the water? If a dock is built, how can the upland owner know if it extends over the line? That issue will likely require a survey that will satisfy both owners.
Private Riparian Rights
Technically, riparian rights pertain to a river or stream, while littoral land borders the ocean, sound or a lake. However, the term riparian is now commonly used for both littoral and riparian land. In addition to ownership of the bed of a non-navigable lake, the abutting upland owner is a riparian owner. That person has been held to have the right, along with all other owners fronting on the lake, to the reasonable use of the surface of the lake. These riparian rights of abutters are owned in common. In other words, each upland owner has the right to use the entire surface of the lake, not just the area over that portion of the bed of the lake owned by the riparian abutter. A developer attempted to erect an apartment building over the bed of Bitter Lake in North Seattle. Even though there was no question as to the developer’s title to that portion of the bed of the lake, it being non-navigable, the court required that the building be removed because of its interference with the rights of the other riparian owners on Bitter Lake to make reasonable use of the surface of the lake.
What use can be made of the beach or the water?
A waterfront owner has riparian rights to use the water but so do all the other upland owners. None could, for example, dam a stream to create a pond or re-route the course of a stream or dredge or add fill to a lake. Water itself is not owned privately – it’s a natural resource, so the public can often also use the water.
The Public Trust Doctrine
The Public Trust Doctrine, typically excepted from title coverages when the insured land is submerged or abuts water, is essentially the theory that vests the government with the authority to protect the public interest, to regulate (including development, commerce, navigation and environmental protection – essentially, zoning) shorelands, tidelands and wetlands, and uplands within 200 feet of these lands. While the term is not necessarily expressly used in our statutes or case law, it is embodied constitutionally in the harbor line system and statutorily in the Shoreline Management Act.47 State agencies involved in different aspects of this include the Departments of Ecology, Fish and Wildlife, and Natural Resources. In addition, the U. S. Army Corps of Engineers must usually issue a permit to place improvements in navigable waters.
Also, the state or federal government has broad regulatory authority under the public trust doctrine affecting both the water and the uplands to the extent it is necessary to protect water quality, fishing resources and public commerce. So a bulkhead intended to preserve upland property, or a dock into the water or even a house on the uplands can be regulated or prohibited altogether.
“A waterfront owner may be out of luck if there are changes to the course of a stream that eliminate access to it.”
And nature will take it’s course…
It’s also important to note that nature can impact title to the land. For example, a waterfront owner may be out of luck if there are changes to the course of a stream that eliminate access to it. More importantly, if a stream is the boundary, owners on both sides might either gain or lose land. If the change is sudden (a man-made or natural mudslide, for example) title won’t change, but the land may be high and dry with no access rights. But, if it happens gradually over a long time period, the boundary line might also move – meaning one of the owners gains land and the other one loses land, but water access would remain for both.
The title company will only affirmatively insure title and boundaries of waterfront land to the extent they’ve been established of record, and if not, will take exceptions to such matters. And, no use rights will be insured. Instead, exceptions for possible rights of other riparian owners or the public will be in the title policy.
Have you dealt with a water boundary concern on a real estate transaction? Please share by leaving a comment below!
We’re excited to announce that we’ve made a few upgrades to our blog here at ticorblog.com. After one year with the same look & feel, we decided that a facelift with a few feature improvements was in order. So without further ado, here’s a quick breakdown on how you can get the most from our new layout:
We Make You Look Good Too
If you’re on our emailing list, chances are you’ve read our posts and shared them with colleagues and clients. We realize that the content is what really brings value here, but sometimes the way in which it’s presented can make all the difference in the world. Now with a more elegant and upscale aesthetic, you can feel even better about sharing these articles and look good in the process! Read more →
Mom just passed away, and the family wants to sell the home. This is a listing with a motivated seller. But who actually owns it?
Of course, the family home (if it isn’t in a trust) will automatically go to the surviving spouse without the need for a probate. But, what about a married person who owned the house as separate property, or Mom who was widowed? Washington law (RCW 11.04.0115) identifies heirs at law who inherit when there is no will, including (in this approximate order) the spouse, children and grandchildren, parents, siblings and children of siblings.
A formal probate allows for the protection and orderly distribution, after payment of debts, of the assets of the deceased to heirs and/or devisees or a sale to a third party by the personal representative. Nonetheless, even though Washington probates are not expensive or time consuming, they often are not done. But how else will the buyer know that all of the title interest is properly conveyed? What if there are valid liens (including estate taxes or state Medicaid reimbursements) against the estate that would otherwise be paid in probate? That is where the “lack of probate” concept comes into play.
Vesting
Title to property of a decedent immediately vests in either devisees (if there is a probated will) or the heirs (if there is no probated will), even if the identity of those parties are unknown at that time – with or without a will, and with or without a probate.
With or without a will
When someone dies, that person will be either testate (with a will) or intestate (without a will). Both can be probated – but it’s not required, even though RCW 11.20. 010 says a will must be filed with the county superior court.
In order for the title company identify who these people are, or whether there is an unprobated will (which could give an interest to a non-relative or charity), it uses an affidavit. The affidavit, usually signed by a relative, must identify all these interests – including the estranged prodigal son who’s been incommunicado for years. It says when and where the deceased lived and died, and identifies any unprobated will or foreign probate. Finally, it states whether Mom received Medicaid benefits, and identifies the value of the estate for estates tax purposes. Based on this information, and deeds from all potential claimants and releases of liens, the title company can usually assume the risk of future claims and insure clear title in the buyer.
Keep in mind that this can be used when the will is probated in another state. Since foreign courts don’t have jurisdiction in Washington, an ancillary court action can be opened in Washington Superior Court that essentially blesses what the foreign court orders. Again, however, that expense and bother can be avoided with the lack of probate approach.
The Realtor® can help the family gather this information and get it to the title company so that the closing can take place and everyone is happy.
When purchasing your first home, the escrow process can be a little confusing. Buyers and sellers may find themselves asking, “What is escrow and why is it needed?”
With that in mind we’ve formulated a brief synopsis of the escrow process in plain english.
An Unbiased Third Party
When buying or selling real estate, escrow is often opened for protection and ease. The escrow agent is setup as a disinterested third party and performs mulitple tasks, as directed, by the parties involved in the transaction. Some of these items include, holding of legal documents, disbursement of funds on the buyer or sellers behalf and distribution of funds in accordance with the instructions set forth by the buyer and seller. Both the buyer and the seller rely on the escrow holder to fulfill the intention of their instructions with consistency and in good faith.
The convenience provided by the escrow holder is realized by buyer and seller due to the fact that both parties can move forward independently, but in parallel to close the transaction. The idea is such that either party can submit inspections, loan commitments, funds, deeds and other items pertinent to the transaction’s closing. When all insructions are in order and consistent, escrow facilitates a seamless closing.
Summary: The Purpose of Escrow
The process of escrow was established to facilitate the purchase and sale of real estate. Here’s a brief outline of the escrow holder’s duties in a transaction:
• Act as the impartial “stakeholder,” or depository of documents and funds
• Process and coordinate the flow of documents and funds
• Keep all parties informed of progress regarding the transaction
• Respond to lender requirements
• Secure title insurance policy
• Obtain approval of reports and documents from the parties as required
• Proration and adjustment of insurance, taxes, rents, etc.
• Record the deed and loan documents
• Maintain security and accountability of monies owed and owing
Do you have questions or comments regarding the escrow process? Please share below.
Each day, most real estate professionals access ‘Plat Maps.’ The need for these maps varies for each property, and each circumstance. In Ticor’s effort to make things easy for clients, we thought you could use some ‘Pointers’ about working with Plat Maps!
6 Tips for Reading Plat Maps:
1. Access – Access is simply how someone can physically reach the property. We have a sample for you here, where you can see that ‘Access’ is shown on map, by
A. city or county road,
B. private driveway (flagpole lot),
C. shared driveway with common ownership,
D. shared driveway with easement, and
E. private road.
Click the map to view an explanation of types of access
2. Views – Ticor usually provides a ‘Close –up’ view of the lot, along with a larger view. Viewing the larger view will help you identify important points, such as where your lot is located, in relation to a major thoroughfare, or greenbelt.
3. Dimensions – These are usually given for the lot as shown, but there can be variances. But, what if no Dimensions are showing?
Places to check further for ‘Dimensions,’ are always available thru Ticor Property Info. For example, Ticor Property Info Specialists can give you a copy of the ‘Face of the Plat’ if available; or can provide approximate dimensions with a map measuring tool.
4. Unplatted, or Platted Property – Platted Property is created by the developer recording a plat. Unplatted parcels are not in a recorded subdivision. Platted land often has “lot and block” legal descriptions, and unplatted usually has “metes and bounds” legals. Of course, there are exceptions to every rule! For platted parcels, we can look at the face of the plat for a wealth of information about the lot and its surroundings. We’ll address this in depth soon, here at TicorBlog.com.
5. Location of Lot – As it relates to a block, always useful to know. We’ll address this more in a future article. In the meantime, it is always wise to check where your subject property ‘sits’ on a block, based on what you’ve seen, vs. what is showing on your Plat Map. Are these different? If so, it’s time to ask for some help from Ticor! You can also compare the lot size to the acreage or lot square feet given on the property profile.
6. Troubleshooting Plat Maps – Don’t assume boundary lines, based on what is showing on a Plat Map. While Plat Maps can give a good idea as do the location of these lines, the only definitive way to know exact boundary lines is thru a survey.
One last note: Remember, King County’s Plat Maps display information a bit differently than Snohomish or Pierce County.
Our Property Information Specialists are at your service!
Situations can arise where the ownership interest in your property changes from the way it was originally acquired. Whether it is due to death, divorce, a parting of ways or the requirements of a new lender it sometimes becomes necessary to remove someone’s name from the title to a property. This is usually accomplished by the party exiting title executing a deed of conveyance in favor of the party or parties that will remain in title. Clearing the interest of deceased parties is an entirely different matter altogether and will not be addressed here.
In Case of Divorce
In cases of divorce, the best way to clearly show which party was awarded the property would be for the party not awarded it to execute a quit claim deed in favor of the party that it was awarded to. Many times the terms of the decree of dissolution and/or settlement agreement in the divorce case don’t properly identify real estate holdings and it can be difficult to determine “who got what”.
If title is held by two or more parties as tenants–in-common and one of them decides to sell or otherwise relinquish their interest they would execute a deed of conveyance (typically a statutory warranty deed or in some cases a quit claim deed) to the recipient(s) of their interest.
When a Party in Title Doesn’t Qualify For a Loan
Sometimes a party in title does not qualify for a loan and if the lender agrees to make the loan to the other title holder(s) a deed of conveyance (typically a quit claim deed) will be executed by the non-borrower to the borrowing party in title to the property.
Seek Legal Council
You should always consult with an attorney before signing any legal documents. You should also consult with Excise Tax Dept. personnel at the local county recorder’s office to help you determine if excise (i.e. conveyance or transfer) tax will be due when the deed is presented for recording.
Why do we need title insurance? Let us count the ways… Below is a scenario that came about in an older, well established neighborhood with a rich history of utility technologies (i.e. a variety of plumbing and utility technologies from the last 80 or so years). Needless to say, in this case a title issue arose when plumbing and utility upgrades became necessary.
The Old Utility Agreement Rears its Head
The Old Agreement
In 1975 an agreement was recorded between Bill Home Owner and the local utility company. This agreement allowed a sub-standard temporary hook-up to utilities (a water line). The agreement stated that the owner would pay a fee at a later time to connect to the water system when the utility company installs / upgrades their system.
Fast forward decades…
The property had been bought and sold several times since the agreement was established. But, when the utility company completed their upgrade, this triggered the need for the homeowner to upgrade their connection to the utility per the 1975 agreement. The cost of this upgrade in today’s dollars is approximately $5,000, a substantial amount that the current home owner did not anticipate when purchasing the home.
The Resolution
Jake and Susan, the present home owners, tendered a claim to Ticor Title with whom they are insured. And in this particular case, it was determined that the matter was covered under their title insurance policy. Ticor coordinated with Jake and Susan and the utility company to pay the outstanding amount owed to the utility company per the agreement. Ticor also received a release of the 1975 agreement from the utility company and recorded the release in order to remove the cloud on title.
Ticor Title is backed by the nation’s largest title insurance claims reserves, giving us a strong financial position and unsurpassed ability to pay claims for our insured. If you are unsure of your current title insurance company’s solvency or ability to pay claims, or have questions about your coverage, please contact us.
This story was provided by Gregg Colbo, Senior Underwriter, Ticor Title. This story is based on real life circumstances. However, the names of the people in this story are ficticious and were chosen randomly. The intent of this article is to illustrate the value of title insurance.
Tip: Click the keyword links in this post to view the definition of the keyword (i.e. click on: 
Mom just passed away, and the family wants to sell the home. This is a listing with a motivated seller. But who actually owns it?
