Title Producer cheat sheet

A title policy insures against defects existing at the Date of Policy; losses from events occurring after that date are excluded.

The owner's policy requires a single, one-time premium and the coverage amount stays level for as long as the insured holds title.

The loan (mortgagee) policy is issued in the loan principal amount, and protection reduces as the mortgage balance is paid down.

The duty to defend is broader than the duty to pay: the insurer defends covered claims until coverage is disproved or the policy limit is exhausted.

Title premiums are not loss-driven like casualty premiums; most of the premium funds search, examination, and curative risk elimination.

Issuing an owner's policy and a loan policy at the same closing qualifies for a discounted simultaneous issue rate in most states.

An owner's policy is not assignable to a purchaser without the insurer's written consent; a resale requires a new policy.

Unrecorded interests-adverse possession, prescriptive easements, unprobated heirs, forgery-illustrate risks a records search cannot eliminate and are the core rationale for title insurance.

Fee simple absolute is the largest estate, of potentially infinite duration, freely inheritable and transferable.

A life estate ends at the death of the measuring life (or a named third party for pur autre vie) and then passes to the remainderman or reverts to the grantor.

Tenancy in common carries undivided fractional shares and no survivorship; each co-tenant may convey or encumber that share, and that owner's creditors can attach it.

Joint tenancy requires the four unities (time, title, interest, possession); a joint tenant's conveyance severs survivorship as to the conveyed share.

Tenancy by the entirety exists only between spouses where recognized: neither spouse may convey alone, and a single spouse's creditor generally cannot reach the property.

In community property states, property acquired during marriage is presumed community; property owned before marriage or received by gift or inheritance is separate.

Deed validity requires a competent grantor, an identified grantee, words of grant, a legal description, the grantor's signature, and delivery accepted by the grantee.

Race-notice recording statutes protect a later purchaser who records first and takes without notice of a prior unrecorded interest; pure race and pure notice statutes differ.

Marketable title is free from reasonable doubt and objectionable encumbrances; insurable title is whatever an insurer will accept, which may be less.

General liens (judgment, federal tax) attach to all real property of the debtor; specific liens (mortgage, mechanic's, property tax) attach to identified parcels.

Ad valorem property tax liens typically prime all other liens on the parcel regardless of recording order.

Mechanic's lien priority commonly relates back to commencement of visible work, so the lien can prime a mortgage recorded after work began.

A federal tax lien generally lasts 10 years from the date of assessment and may be refiled to extend it.

Restrictive covenants and conditions are encumbrances enforced in equity; they are normally carried as Schedule B exceptions rather than treated as curable requirements.

Encroachments, overlaps, and boundary line disputes are disclosed by survey, not by the recorded public records.

Frequent record defects: break in the chain of title, forged or undelivered deed, missing heir, defective legal description, unreleased mortgage, incorrect marital status.

A recorded lis pendens gives constructive notice of pending litigation affecting the land and binds purchasers who take during the action.

Homeowners association assessment liens may be subordinated to a first mortgage by statute or by the terms of the declaration.

Chain building searches the grantee index backward to a safe starting point, then the grantor index forward for each owner's period of ownership.

For every owner in the chain, the examiner searches that owner's name in the grantor index for the ownership period to catch conveyances and liens.

Lien and judgment searches must include name variations and be run in the county where the land sits; federal tax liens are recorded in that same office.

A wild deed-recorded but never linked into the chain by a recorded connecting instrument-gives no constructive notice to later purchasers.

Examination produces requirements (defects to be cured before closing) and exceptions (matters to be excluded from coverage).

The effective date and time of the search define the gap; a bring-down or date-down search closes that gap before disbursement.

Constructive notice arises from properly recorded instruments; inquiry notice arises from facts on the ground that would prompt a reasonable investigation.

State title standards, adopted by bar or title associations, supply uniform rules for deciding whether a given defect is curable.

Schedule A identifies the insured, the estate or interest insured, the policy amount, the legal description, and the Date of Policy.

Schedule B-I lists Requirements that must be satisfied and removed; Schedule B-II lists Exceptions that remain excluded from coverage.

Standard Exclusions include governmental police-power regulation (zoning), eminent domain, creditor's rights claims, environmental matters, and matters created or assumed by the insured.

The 2021 ALTA Owner's Policy insures against defects, liens, encumbrances, adverse claims, unmarketability, lack of access, and specified encroachment and survey risks.

A loan policy insures the validity, enforceability, and priority of the insured mortgage as of the Date of Policy.

Endorsements amend coverage: ALTA 4 addresses condominiums, ALTA 9 restrictions and encroachments, ALTA 8.1 environmental liens, ALTA 6 variable-rate mortgages.

A date-down endorsement advances an existing policy to a new Date of Policy; a modification endorsement (ALTA 11) covers changed loan terms.

An owner's policy is not transferable to a buyer without insurer consent, so a resale requires a new owner's policy.

Because covered risks are subject to the Exceptions and Exclusions, a matter listed on Schedule B-II is not rescued by the general grant of coverage.

Underwriting determines whether to insure, at what amount, and with which exceptions, endorsements, or conditions.

Red flags include recent construction, pending foreclosure, bankruptcy, estate or divorce sales, entity ownership, quick flips, severed minerals, and parties in possession.

Mechanic's lien exposure is managed with owner's affidavits, indemnities, escrow holds, or mechanic's lien coverage.

A closing protection letter shifts to the underwriter liability for the agent's misapplication of funds or fraud in a specified transaction.

Claims handling sequence: prompt notice, proof of loss, insurer-selected counsel and defense, and settlement or payment within the policy limit.

Subrogation allows the insurer, after paying a loss, to pursue the party legally responsible for the defect.

Loss is measured by diminution in the value of the insured estate or by cost to cure, never exceeding the policy amount.

Curative action-quiet title, releases, corrective deeds, affidavits-can eliminate a defect instead of paying a claim.

Escrow instructions state the conditions for disbursement; the escrow holder is a neutral stakeholder, not an advocate for either party.

Good-funds rules require collected, available funds (wires, cashier's checks) before disbursement; wire instructions should be verified using a known telephone number.

Prorations credit the seller for taxes paid in advance and debit the seller for taxes in arrears as of the closing date.

Transfer taxes and recording fees are closing costs allocated by the purchase contract, local custom, or state statute.

RESPA Section 8 bars fees or things of value for referrals; Section 9 bars a seller from conditioning the sale on use of a particular title company.

Affiliated business arrangements require written disclosure of the relationship and an estimate of the charge, and the buyer must not be required to use the affiliate.

The title premium is collected at settlement by the settlement agent and either remitted to the underwriter or retained under the agency agreement.

Recording the deed and mortgage and issuing the final policies complete the transaction; policies are normally issued after recording.

Title agents and agencies are licensed by the state insurance department, requiring examinations, background checks, an underwriter appointment, and continuing education.

Premiums and escrow funds are trust funds; commingling them with agency operating funds is prohibited.

Filed or promulgated rates must be charged as filed; rebating premium or offering inducements violates rate and rebate laws.

RESPA and state law prohibit kickbacks for referrals; marketing service agreements must pay fair value for actual services rendered.

Agents may not give legal advice or represent parties in court; complex curative work is referred to licensed counsel.

Record retention rules require preserving policy, escrow, and disbursement records for specified periods and producing them on regulatory examination.

Fiduciary duties to the underwriter include timely premium remittance, adherence to underwriting guidelines, and prompt claim reporting.

Agent authority is defined by the agency agreement and power of attorney; acting beyond it can void coverage and create personal liability.