|
TLA would like to report the posting of "Common Title Insurance Pitfalls For The General Practitioner to
Avoid"on the CLTA website located at www.clta.org. Click on the appropriate News Express button, or the
Legal Developments button found on the sidebar. The article addresses the following matters:
1. Probate Code Section 13100, et seq.
2. Creation of a Revocable Trust
3. Power of Attorney Issues
4. Independent Administration of Estates Act
5. Real Property Issues Before and During Marriage and Following Dissolution of Marriage
6. Incomplete Information on an Abstract of Judgment
7. Authority of Conservators and Guardians to Sell or Encumber Real
Property
8. Getting to Know Your Local Title Company Counsel
While the article addresses statutes and case law particular to the state of California, the issues addressed
may create problems faced by title attorneys and underwriters in all states. For example, the issue addressed
under item 2 above and its impact upon an existing title insurance policy has been the subject of discussion in
various recent real estate law articles and publications. Of particular concern is the impact of policy C&S
clause 2 if the creation of a Revocable Trust is a post policy event. Reference is made to a number of articles
discussing this event on the Endorsement link of this website. The issue is not confined to trusts however. It is
equally applicable to the subsequent creation and transfer to an LLC, as discussed in the recent case of
Gebhardt Family Investment, L.L.C. v. Nations Title Insurance of NY, Inc., Ct. Special App. Md., No. 1510
Sept. Term 1999 (June 6, 2000), 2000 WL 719841.
With reference to item 3 above, Power of Attorney requirements vary from state to state. Recently,
Pennsylvania amended the PEF Code relating to Chapter 56 (20P.S.5601 et seq.) relating to Powers of
Attorney. Those changes were reviewed in Spring 2000 issue of the TLA Newsletter. Power of Attorney
issues have also been the subjects of recent Fall 2000 DIRT posts.
With regard to item 5 above, attorneys should be concerned with the effect of divorce upon coverage under an
existing title insurance policy. This matter was recently addressed in an article appearing in the October 2000
issue of Title Management Today, prepared by Marvin N. Bagwell Esq., entitled Divorce: When Does
Coverage Continue Under an Existing Title Insurance Policy.
Other title insurance issues of concern frequently overlooked by the general practitioner are:
collateral mortgages, cross collaterization of debt or cross stream financing; foreclosure and/or deed-in-lieu of foreclosure scenarios;
the effect of a Mortgage Modification Agreement upon the coverage under an existing title insurance
policy; purchase options or rights of first refusal; substitution of corporate shareholders or substitution of partners.
Finally, the general practitioner should become familiar with the risks not covered by title insurance. James M.
Pedowitz, former Chief Counsel of Ticor Title Guarantee-New York, recently prepared an excellent article
entitled What Title Insurance Does Not Cover, for the NYSBA, Real Property Section. The article was
reprinted with permission in Title Management Today, May 2000, Vol. 10, no.5.
If you should have any questions or concerns regarding title insurance issues or coverage matters please
contact us by email at
|