© 2008 Dearborn Real Estate Education Title Insurance for Real Estate Professionals, 2 nd Edition...

© 2008 Dearborn Real Estate Education

Title Insurance for Real Estate Professionals, 2nd Edition

by Jeanine W. Johnson


CHAPTER 1

BASICS OF TITLE INSURANCE

“What do Title Insurance Companies do?”


• Discuss how title insurance indemnifies• Explain the bundle of rights• Summarize components of real estate• List and explain government rights in land

LEARNING OBJECTIVES


KEY TERMS

Look at the list of Key TermsCheck off any you do NOT recognize


Title insurance companies Title insurance companies

"insure” "insure” ““title” to title” to

““real property” real property”


““Insure” Insure” $$$$$$$$$$$$

To indemnify by providing To indemnify by providing monetary reimbursement monetary reimbursement

for lossesfor losses


““Title” Title”

The rights of ownership The rights of ownership in real propertyin real property


“Real Property” and its various components


“Real Property components”

1. SURFACE


“Real Property”

2. SUBSURFACE


3. AIR SPACE

“Real Property”


4. RIGHTS

“Real Property”


Real Property includes “Improvements”

Attachments to real estate intended to be PERMANENT

Examples: houses, fences, driveways, trees, bushes…


Real Property Includes “Fixtures”

Attachments to improvements that become part of the real estate.

Examples:Heating, Plumbing & Electrical Fixtures


• Trade Fixtures used in a business or trade (usually when leasing.)

• Emblements, or farm crops, can be sold separately from the land.

Exceptions to fixture rule


Chattels

Personal Property, i.e.EVERYTHING that is NOT real estate

Examples: Furniture,

Vehicles, Stocks, Bonds


Chattels

Include

Cash, Contracts, Purchase

Agreements


Modular Housing Real or Personal Property?

Is it attached as an improvementand taxed as real property?


RIGHTS, TITLE AND INTERESTS

Certain Rights always belong to the Government


Government Rights

1. Police Powers


Government Rights

2. Eminent Domain


3. Taxation

Government Rights


Government Rights

4. Escheat


HIERARCHY OF GOVERNMENT RIGHTS


Federal Government is highest, followed byState followed byCounty and then Municipal


PRIVATE RIGHTS IN LAND

are often discussed in terms of a “bundle of rights”.


Title insurance can insure almost any estate in real property-

fee title, a mortgage, a land contract,an easement...


Three AreasTitle Companiesexamine to reduce risk


CONSTRUCTIVE NOTICE

the rights shown by the public record.


ACTUAL NOTICE

when something can be

observed, heard or sensed.


RIGHTS AS CONSEQUENCE OF LAW

Unrecorded documents, grantors under legal age, fraud, forgery, duress, insanity, incompetency, unknown heirs, undisclosed marriage, identity theft…


REVIEW QUESTIONS

© 2008 Dearborn Real Estate Education Title Insurance for Real Estate Professionals, 2 nd Edition...

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Transcript of © 2008 Dearborn Real Estate Education Title Insurance for Real Estate Professionals, 2 nd Edition...