Title Examination and Disposition of Objections. Kristin V. Bellouny, Esq. Title Associates New York, New York

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1 Title Examination and Disposition of Objections by Kristin V. Bellouny, Esq. Title Associates New York, New York 87

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3 5. Title Examination and Disposition of Objections By Kristin V. Bellouny, New York, N. Y. A. Examination of title B. Title policy Abstract of Title This is a full and complete history of the title to a piece of property from which the record ownership and encumbrances affecting the property are determined. The abstract is the result of searches of the County Clerks Office or the Register s Office, the tax office and the Courts. Most upstate contracts call for the seller to deliver a title abstract, tax search and up-to-date survey. The Albany contract calls for a title abstract or fee title insurance policy at the expense of the purchaser or seller, as indicated. In Monroe County, the approved contract provides that the abstract of title be redated to a date past that of the contract. ii) Title Commitment This is the compilation and distillation of the information gathered in the abstract of title. It sets forth the ownership of the property, it contains a description of the property to be insured and all items that are exceptions to title. The exceptions are matters that the title policy will not insure against. What is covered: The policy of title insurance covers loss to the insured by reason of encumbrances or defects in the title which the title company failed to disclose in its title search and commitment. Further, it insures the correctness of the searches of all instruments, liens and charges affecting title to the property. (Insurance Law 6401) What is not covered: a) Acts of the insured, defects the insured has caused or allowed b) Zoning, building laws, regulations which restrict, prohibit or regulate occupancy c) Post-policy events these are matters attaching or created subsequent to the date of policy d) Matters resulting in no loss or damage to the insured C. Title report and disposition of title objections The Title Report/Commitment 89

4 a) review all recorded and filed documents set forth in the abstract of title b) certify the record owner c) certify the description of the premises to be insured d) raise all encumbrances, liens and defects affecting the title to the premises as exceptions or objections in Schedule B of the Report: Rights of Tenants Mortgages Judgments, State Tax Liens, Federal Tax Liens Estate Exceptions, Estate taxes Disposition of Title Objections/ Exceptions a) Title Affidavit b) Escrow sufficient funds to pay c) Proofs of payment d) Stipulation and Cancellation of Action and Lis Pendens e) Prior Title Policy f) Indemnity Letter/ Mutual Indemnity Agreement D. Endorsements and affirmative insurance These are available to provide additional coverage over some of the exceptions/objections raised in the Schedule B of the policy. Endorsements: New York Standard Endorsement is attached to every policy of insurance issued in New York State Special Risk Endorsements are available and require the payment of an additional premium: TIRSA 9 Endorsement Revolving Credit Mortgage Endorsements (RCE-1, RCE-2, RCE-3 & RCE-4) Non-Imputation Endorsement Contract Vendee Endorsement (Residential) Contract Vendee Endorsement (Commercial)* SWAP Endorsement* Additional Interest Endorsement* Mezzanine Endorsement* Option Endorsement* * Requires Title Insurer approval prior to issuance E. Rates of insurance Rates of Insurance are filed with the Department of Financial Services (formerly the Insurance Department) II) Title Insurers in New York State operate pursuant to the Title Insurance Rate Service Association, Inc. Rate Manual F. Referrals and representation of multiple parties 90

5 Rule 1.7 CONFLICT OF INTEREST: CURRENT CLIENTS (a) Except as provided in paragraph (b), a lawyer shall not represent a client if a reasonable lawyer would conclude that either: (1) the representation will involve the lawyer in representing differing interests; or (2) there is a significant risk that the lawyer s professional judgment on behalf of a client will be adversely affected by the lawyer s own financial, business, property or other personal interests. (b) Notwithstanding the existence of a concurrent conflict of interest under paragraph (a), a lawyer may represent a client if: (1) the lawyer reasonably believes that the lawyer will be able to provide competent and diligent representation to each affected client; (2) the representation is not prohibited by law; (3) the representation does not involve the assertion of a claim by one client against another client represented by the lawyer in the same litigation or other proceeding before a tribunal; and (4) each affected client gives informed consent, confirmed in writing. G. Note any Recent Title Insurance Developments (on line materials) 91