Title Insurance and Why a Property Needs it When Buying Land or Real Estate

Title insurance is indemnity insurance. It essentially is a backup plan in the event there is an issue the ownership of the real property you are buying. It protects the buyer against financial loss from defects in title to real property and from the invalidity or unenforceable mortgage liens. Most home purchases have had debts on them. A buyer needs to ensure those debts to a bank or mortgage lien holder has been released. It is also meant to protect the current property owner's and or the lenders on the property their financial interest in the real property. This protects both the buyer, seller and lender against loss due to title defects, liens or other matters. Notwithstanding it will also defend against a lawsuit. Virtually everyone gets title insurance on a home when the sale is between strangers. Not everyone gets title insurance when the quit claim on real property between family members, joint tenants, and married couples. What we have found is many land parcels transactions and even home sales is where one spouse quit claims on a property to the other spouse. Years in the future that spouse retaining title sells the property. The title shows that a prior spouse quit claimed on the property without title insurance. In many cases there is an unrecorded quit claim deed. This recorded or unrecorded quit claim will create a cloud on title. A new title insurance company will require that the prior spouse sign a new quit claim deed. In many cases that prior spouse can’t be found is deceased, or is out of the country. The seller may have great difficulty in selling the home. Another major issue are deeds of trust. This is where one party buys land with a debt on the property. The buyer paid off the debt, but there was not a re-conveyance deed recorded showing the debt was cured. We have seen this a lot in many cases where the deed was paid off even decades ago. In this case the seller of the property must find the prior owner and get them to sign a re-conveyance, or if a seller is lucky the new title company will approve the sale, but will be held harmless if the old property owner shows up asking for the old debt to be paid off if it hasn’t. This clearly demonstrates that selling property with past debt can tangle up the sale of that property in the future. Occasionally, a seller may have to bond around an old deed of trust. This is where a seller pays a bonding company to protect the new buyer against an old debtor coming forward and requesting the old debt to be paid. This bonding process protects the title insurance company against such an occurrence, and places the responsibility on the seller with that prior debt to pay off that debt. The bonding process will not work for a foreign seller though. If a foreign seller has a deed of trust (debt) on a parcel that doesn’t show a re-conveyance then a bonding company will not allow a bond unless the foreign seller has other US real estate that the bonding company can attach the bond to. The bonding company needs some protection in the event the debtor wants a debt paid, but the prior seller is foreign. In such a case a foreign seller can’t sell the real estate until they can show a re-conveyance or demonstrate to a title insurance company that the debt was fully paid. In 98% of cases the title company will want the re-conveyance recorded. Buyer and seller beware of deeds of trust and quit claims.

Los Angeles Orders Quake Retrofit for Many Older Buildings

Recent Associated Press Article This is not necessarily regarding land, but it projects that capital in Los Angeles County will focus on developed Real Estate. Thousands of older wood and concrete apartment buildings vulnerable to collapse in a major earthquake would get costly upgrades under sweeping retrofitting rules passed Friday by the Los Angeles City Council. The mandate would affect as many as 13,500 so-called soft-first-story buildings, which are typically wood-frame structures with large spaces such as parking lots on the ground floor. As many as 1,500 brittle concrete buildings would also require upgrades. The measure passed on a 12-0 vote. "There's no question that we're going to have an earthquake. The question is, when?" Councilman Gil Cedillo said. "In here we've laid out the groundwork for the seismic retrofitting that needs to be done." Before the vote, representatives for residential landlords and commercial building owners signaled their approval of the plan — while expressing concerns about potential costs. City leaders will now have to agree on how the estimated $5,000-per-unit retrofitting would be split between tenants and landlords. The law currently allows owners to increase rents up to $75 per month to pay for a required earthquake retrofit, but both sides say such a hike is too steep. One proposal is to divide the costs 50-50 and cap possible monthly rent increases at $38. To help pay for the upgrades, apartment groups are looking for certain financial support, such as breaks on property and state income taxes and business license and building permit fees for owners who retrofit. The proposed quake retrofitting mandate is part of an effort by Mayor Eric Garcetti to make the city resilient to major earthquakes. His plan released in December focuses on rapidly identifying and retrofitting at-risk residential and commercial buildings, fortifying major water systems that would be severed by a huge quake and keeping telecommunications systems operating. The goal of the mayor's broad plan is to keep the region sufficiently functional to avoid a long-term economic collapse despite what seismologists say is an inevitable jolt on the order of a magnitude-7.8 quake caused by a 200-mile-long rupture of the mighty San Andreas Fault. Wood apartments will be given seven years to complete construction once an owner is ordered by the Department of Building and Safety to retrofit the building. Owners of brittle concrete buildings will have 25 years to do the work. Estimates for upgrades for soft-first-story structures range from $60,000 to $130,000 per apartment building. Taller concrete buildings can cost millions of dollars to strengthen. Studies estimate that a massive earthquake in the Los Angeles area could kill up to 18,000 people and cause some $250 billion in damage. Sixteen people were killed in the collapse of a soft-first-story building during the Jan. 17, 1994, Northridge earthquake. The magnitude-6.7 jolt was the last significant seismic disaster in the Los Angeles region. U.S. Geological Survey seismologist Lucy Jones, the mayor's earthquake science adviser who was a consultant for the council, was on hand for the vote. She pushed for passage of the plan, saying lives would be saved. "It's not every day we have the opportunity to save lives," Council President Herb Wesson said after the vote. "Today we had that opportunity."

Adverse Possession of Lancaster, Palmdale California Land

We ran across this issue as we were trying to sell a property where the owner lived overseas outside the Antelope Valley area. We were attempting to drive by the property and we found an illegal dwelling and a man with a gun defending the property. Now this doesn’t occur everyday, but in parts of the Antelope Valley surrounding the cities of Lancaster and Palmdale, Ca. there is a lot of vacant land with little access or only a dirt road. Now the squatter was on the property but had taken physical possession. He appeared to have been living on the property for some time and making a home of his own, but didn’t complete all the factors of adversely possessing the property. You can acquire a property by adverse possession including a house or vacant land in California, but the action will take at least five years.

The process to make a claim of adverse possession in California by a claimant (the party seeking to gain title to the property) they must successfully demonstrate the following. 1. Possession under a claim of right or color of title, which means ownership of property by a person in possession, without being regular( so not the documented registered owner), Color of title is where the claimed owner has some piece of paper claiming to transfer title to him or herself. This can be done writing a document saying you are the owner. 2. Actual, open, notorious occupation (protected by a substantial enclosure such as a fence, barrier or wall and usually cultivated or improved. 3. Claimant is adverse and in hostile possession. 4. Continuous possession for a period of five years. 5. Payment of all taxes assessed against the property during the five-year period. Most people think you just have to pay the taxes, but in order to fully take the property and defend it in court then you need to have all of the above.

It could be easier to acquire this type of property at a tax sale then doing all of the above unless it is a house where the time and value is more in your favor. Adverse possession of tens or hundreds of acres of land could be more difficult to fence if you are challenged in court. You may have to do more research to find out what is open and notorious in adverse possession of vacant land. We have ran across potential properties that can be taken by adverse possession as the property owner has given up and no longer intends to pay the property taxes, so the other parts of adverse possession can be undertaken.