> Iowa gets along pretty well without Title Insurance.
I am really starting to lose faith in those Title Commitments that these title companies put out. I had one title company tell me they do not even do 30 year searches anymore. Its more like 20 years. In Florida, we have the Marketable Record Title Act which limits possible title defect claims older than the root of title (that must be at least 30 years old). So it looks like they may not even be searching back that far. It sounds like they are playing the odds and papering over any title problems that might exist.
> > Iowa gets along pretty well without Title Insurance.
>
> I am really starting to lose faith in those Title Commitments that these title companies put out. I had one title company tell me they do not even do 30 year searches anymore. Its more like 20 years. In Florida, we have the Marketable Record Title Act which limits possible title defect claims older than the root of title (that must be at least 30 years old). So it looks like they may not even be searching back that far. It sounds like they are playing the odds and papering over any title problems that might exist.
:good: Yes, Insurance is like Las Vegas. You put down your money and maybe you win. The House (Insurance Company) knows the odds and stacks them in their favor. Simple Business.
We, as an industry, got accustomed to a time when Insurance Companies had a very low tolerance for risk and did their homework well.
Times changed. Now they have different approach to keep the odds in their favor (higher premiums, more exceptions, tons of boilerplate) so that they have less initial investment in research. The change was gradual and many consumers did not really notice.
So, we were able to rely on using the results of their research as a substitute for doing it ourselves. That was a little faulty on our part, but the odds were in our favor, so we relied on it... despite finding the occasional error/omission.
The problem with that is that many of us never learned (or forgot) how to properly research. Changes in technology compounded it.
We all need to relearn how to do the research We need!
Crazy as it sounds, I know at least one instance where the title insurance company sued the buyer and seller over a quiet title action. There were a lot of odd particulars in the case.
The seller had purchased title insurance and a commitment had been issued. This was a large and valuable piece of property that eventually became a commercial goldmine. There was apparently some improper signatures and conveyance 40 years prior and some of the heirs got a junk-yard dog attorney and went for all they could get.
Rather than make good on their "policy" they decided the seller was liable for the cost of the quiet title suit. They sued everybody in sight. The surveyor was even named in the suit, although later dropped.
It was kind of like a car insurance company suing you to recoup their loss because you wrecked your car...
Sounds insane until you see it really happen. :pinch:
I know of a case even odder than that.
I surveyed a 120 acre parcel whose access was in question. There was a "road" mentioned in the description near the northern line of the property but definitely on the property. The description originated from 1895. The "road" was on the USGS topo maps going back to the 1930's. But, the road had never been state maintained and my client had no specific easement across the road to a state maintained road. The distance involved was close to 2 miles of the private road from the nearest maintained road.
Someone from out of state comes along and twists my clients arm hard enough that my client sells. The buyer gets full title insurance coverage without exceptions. As soon as the sale is done the buyer tells the title company the neighbors won't let him access his property. The TI Co sues everyone in the area for access.
Two years into the process I am in the office of the attorney for the TI Co. Am reviewing my notes, preparing for a deposition. The attorney for the TI Co comes into the room white as a sheet. "Did the buyer know there was no right of way?"
I told him that everyone but the idiot attorney who certified clear title understood there was no access. "The note to that affect is on my map." I pointed to the plat and the note.
It wasn't long after that the TI Co dropped all the lawsuits. They then went to the buyer and gave him back the money he paid for the land and said that they (the TI Co) now owned the land.
Only time I ever saw it happen but apparently they can pay off a claim by giving the client their money back and take possession of the land.
Larry P
> > Iowa gets along pretty well without Title Insurance.
>
> I am really starting to lose faith in those Title Commitments that these title companies put out. I had one title company tell me they do not even do 30 year searches anymore. Its more like 20 years. In Florida, we have the Marketable Record Title Act which limits possible title defect claims older than the root of title (that must be at least 30 years old). So it looks like they may not even be searching back that far. It sounds like they are playing the odds and papering over any title problems that might exist.
My understanding of what Title Companies do here is they only search back to the last time they issued a policy for the parcel.
On what grounds were the buyer and seller liable? Was the title company successful in their suit?
> On what grounds were the buyer and seller liable? Was the title company successful in their suit?
I tried to find a copy of the suit, but too many phone calls..
(from memory) Basically the title company's biggest gripe was a Warranty Deed sometime back, like thirty years, where a Trustee of a family estate trust conveyed the property to himself and then liquidated the property to the heirs. The seller was one of those heirs.
Their posture was their reliance on the title being "Warranted" at that time. There were other heirs that felt they had color of title and no one could prove the original trust acted in the interest of ALL the heirs.
Basically the title company said the familt trust's original warranting of the title should put the act of perfecting the title on trust, and not the insurer. No one wanted the land. The "quiet title" suit was going to consist of paying off anybody that could prove they (or their family) had been cheated in the original disposition of the estate. Nobody wanted to cough up any money and everybody thought the seller should pay since he sold the property for a couple of million.
The suit against the buyer was actually a counter-suit because he filed a claim against the insurer to quiet title, if I remember. I don't remember exactly how it was settled, but lots of people walked away with a bag o' money...including the attorneys.
None of that would have happened if grand-daddy's 80 acres hadn't turned into a shopping mall. 😉
On the contrary, the limits of possession are what is covered if the survey exception is removed. Possessory rights are part of title. The main difference is that in a title theory state, the lender can take possession. In a lien theory state, the lender can not take possession but rather must put it up for sale to recoup their lien.