Submitted 06/27/12 06:38 PM
I am in the process of purchasing an REO property (condo) in San Francisco.
The title services are being handled by Landsafe (Seller's choice) which will be issuing a Fidelity policy.
The prelim appears to contain possibly some garbage exceptions. I am concerned I am not getting a clean title. Should I be worried about the following on Schedule B?
1 (B) ASSESSMENTS, IF ANY, FOR COMMUNITY FACILITY DISTRICTS AFFECTING SAID LAND WHICH MAY EXIST BY VIRTUE OF ASSESSMENT MAPS OR NOTICES FILED BY SAID DISTRICTS
(C) "ANY UNPAID AND/OR DELINQUENT BOND OR ASSESSMENT AMOUNTS WHICH MAY HAVE BEEN REMOVED FROM THE ROLLS OF THE COUNTY TAX ASSESSOR AND WHICH MAY HAVE BEEN REMOVED FROM TAX BILLS AND TAX DEFAULT REDEMPTION AMOUNTS."
5. WATER RIGHTS, CLAIMS OR TITLE TO WATER, WHETHER RECORDED OR NOT.
12. INTENTIONALLY DELETED
14. INTENTIONALLY DELETED
15. THE REQUIREMENT THAT LANDSAFE TITLE OF CALIFORNIA, INC BE PRESENTED WITH A LETTER FROM ALL THE HOMEOWNER'S ASSOCIATION STATION THAT ALL LIENS/DUES ARE CURRENT.
NOTE: THERE MAY BE MORE THAN ONE HOMEOWNER'S ASSOCIATION TO THIS PROJECT.
16. THIS COMPANY ASSUMES NO LIABILITY FOR THE DISCLOSURE OF SPECIFIC PARKING SPACES NOTED IN THE LEGAL DESCRIPTION HEREIN. NO DETERMINATION CAN BE MADE AS TO THE INDIVIDUALS ACTUALLY IN POSSESSION OF SAID PARKING SPACES.
17. RIGHTS OF TENANT(S) IN THE LAND, IF ANY, AND RIGHTS OF ALL PARTIES CLAIMING BY, THROUGH OR UNDER SAID TENANT(S)".
18. NO POLICY WILL BE ISSUED UNDER THIS ORDER UNTIL WE ARE FURNISHED WITH A STATEMENT OF INFORMATION FROM ALL NEW OWNERS.
19. PLEASE NOTE: THE MAP ATTACHED, IF ANY MAY OR MAY NOT BE A SURVEY OF THE LAND DEPICTED HEREIN. LANDSAFE TITLE EXPRESSLY DISCLAIMS ANY LIABILITY FOR LOSS OR DAMAGE IS EXPRESSLY PROVIDED BY THE TERMS AND PROVISIONS OF THE TITLE INSURANCE POLICY, IF ANY, TO WHICH THIS MAP IS ATTACHED.
Should I be concerned about any of the above? I was offered to pick my own title company as part of the purchase contract but did not take the option at the time because I did not know any better. What are my options? Should I request to switch to a title company of my choice (at my own cost)?
I need to resolve this ASAP, so I would really appreciate any advice or suggestions! Thank you in advance.
Submitted 06/27/12 07:15 PM
You may want to contact the title officer who is listed on the prelim. They are often a great source of information and they can speak to the particulars of the property that you are buying. As far as I can tell, these are exceptions that would be expected, and chances are that you would see either the same or similar exceptions in a title report issued by the company of your choice. That's just my personal opinion. You should not consider anything I said as legal advice. As matter of fact, you should not construe anything anybody says on the Internet as legal advice unless they specifically agree to provide legal advice to you based on your particular facts.
Your question is the perfect example why people should have a legal plan (e.g., Legal Shield) that would entitle them to ask these kinds of questions of a lawyer without having to pay for it extra. You may want to consider it (it's only $17/month). I am a lawyer myself, but I also know I don't know everything, nor do I desire to know everything. For me, a Legal Shield membership was a no brainer.
Submitted 06/27/12 07:15 PM
Here are a few additional things on the prelim that look concerning:
"... THIS REPORT, (AND ANY SUPPLEMENTS OR AMENDMENTS THERETO) IS ISSUED SOLELY FOR THE PURPOSE OF FACILITATING THE ISSUANCE OF A POLICY OF TITLE INSURANCE AND NO LIABILITY IS ASSUMED HEREBY. IF IT IS DESIRED THAT LIABILITY BE ASSUMED PRIOR TO THE ISSUANCE OF A POLICY OF TITLE INSURANCE A BINDER OR COMMITMENT SHOULD BE REQUESTED...
IT IS IMPORTANT TO NOTE THAT THIS PRELIMINARY REPORT IS NOT A WRITTEN REPRESENTATION AS TO THE CONDITION OF TITLE AND MAY NOT LIST ALL LIENS, DEFECTS, AND ENCUMBRANCES AFFECTING TITLE TO THE LAND."
Lender Supplemental Report:
"OUR ALTA POLICY WHEN ISSUED WILL CONTAIN CLTA ENDORSEMENTS 100 AND 116.
Should I be concerned about the above?
Submitted 06/27/12 07:28 PM
Ute -- thank you very much for the info about LegalShield. I didn't know such a service existed, and I will definitely look into it.
I did speak with the title officer, but he wasn't very helpful. He told me that all of the above exceptions are standard and MUST be included in a title report on a condo by EVERY title company in California. I know for a fact this isn't true as I have reviewed other title reports and they definitely don't include the above exceptions...
Submitted 07/01/12 06:13 PM
First congratulations on paying attention to what you're doing. Defects in title can be a huge problem. Are you purchasing a condo or TIC?
I would ask to talk to the Title Officer, but remember, s/he is the employee of the Title Company and doesn't have a duty to protect your interest. Also, explain your concern and ask to have a conversation with the broker in your sales associate's office.
Does the purchase agreement say you're getting a CLTA Homeoowner's Policy of Title Insurance? The standard California Association of Realtors purchase agreement specifies that title policy, but I don't know what the San Francisco Purchase Agreement says.he
If you're using the standard CAR purchase agreement you can cancel the purchase agreement with no forfeiture of your deposit if you disapprove the prelim. If you think another Title Company won't have those exemptions, you can reject the prelim unless the Title Company is changed. In San Francisco I think the buyer customarily pays for the CLTA (it varies from county to county) so you should be able to pick the company.
As a last resort consult with your own attorney.