All Forum Posts by: Peter Walther

I agree with Tom, if you and your lender know about the condemnation notice and any notices of violation, the title underwriter should approve issuing the policy with an exception for them.

 Sure thing

I never worked on the agent side of the relationship, just the underwriter, so I can't be certain, but I believe that if it's a client they've done business with before and expect to again they're fine with it.  Keep in mind that a title report is different than a title commitment and I believe that an agent would expect to be paid if a commitment is issued but the transaction doesn't close.

Title insurance premiums are promulgated by the state in Florida so every agent will charge the same amount.  The associated closing costs vary so talking with a title agent in the county where the property is should give you a good estimate.  Sellers generally pay for the owner's title policy with the buyer paying for the lender's policy if there's a mortgage though many flipper/rehabbers offer to pay all closing costs as an incentive to the seller.

I suspect you're assuming the seller knew about the change in zoning which may not be true.  In any case, if I were the seller I'd ask why you as buyer didn't investigate the current zoning.  Have you checked to see what the value of the property is zoned as commercial?  Perhaps the value is more than zoned as residential.  Generally, isn't property used as residential worth less if it is in the middle of commercially zoned property?

I believe zoning matters are excluded from coverage in most standard title policies but there may be some coverage if you purchased a Homeowner's form policy.  Even then there may not be coverage unless the city forces you to remove the improvement.  I suggest you submit a claim to the insurer and see what they say.  The worst they can do is deny coverage.

I suspect that a buyer of an interest in an LLC would not be able to purchase a title insurance policy since a member of an LLC does not have an insurable interest in the property, only the LLC does. Now if the LLC is an insured under an existing policy one might be able to purchase an endorsement to the policy moving the effective date through the date of the purchase, but keep in mind, the policy probably excludes acts of the insured, so if the title search misses a defect of lien, say a mortgage created by the LLC and not disclosed by the seller of the LLC interest, any loss would probably not be covered.

Title insurance is what's known as monoline, so for the underwriter, it's all they do.  The premium, search fees and interest on investments are the sole income streams.  Profitability is tied closely to the real estate market of course.  More transactions, purchase and refi, the more income.  Sometimes net margins can be as high as 30%, other times it's in the red.  Agents on the other hand receive closing fees and other charges that add to the bottom line.  It can be very profitable, or not.

I think one of the main differences between the two is the liability coverage you receive for a missed document.  In the case of a title report the liability may be limited to as little as the amount you paid for the report, $50 or $60.  Some of the limitations are for up to $1k.  Of course, that doesn't help if you've spent more in reliance on the report.  Many people don't realize that even a title commitment, a contract where the insurer agrees to insure title if its conditions are met, limit liability to the amount the proposed insured spends in trying to meet the commitment requirements.  Searchers do miss documents, examiners do misinterpret what effect documents have, there are matters which effect title that can't be found in a search, so I'm carful in thinking a title report is a panacea for moving forward.

I think I would go to a title agent in the county in MS and ask to purchase a title policy insuring my interest in the property.  They probably would produce a title commitment that lists the requirements for the issuance of the policy.  If one of the requirements is for a quiet title action I would ask if there were any alternatives that would address the concern.