REAL ESTATE TRANSACTIONS METHODS OF TITLE ASSURANCE Professor Robert J. Weiler October 3, 2012 Presented by James Havens Havens Limited 141 E. Town Street Suite 200 Columbus, Ohio Fax:

Alan Greenspan “Laws protecting & securing property rights directly responsible for a 7 fold increase in the standard of living since 1900.” Why: Individuals risk effort. Lenders & Investors risk capital.

My Background Real Estate Litigation Transaction Cardinal Title Commercial & Title Escrow Real Estate Project Development Real Estate Management

OUTLINE OF DISCUSSION 1. Real Estate Contract 2. Why A Recording System? 3. What Is A Title Search? 4. Why Do We Use Title Insurance? 5. How Do We Handle “Off Record” Title Matters

9. EVIDENCE OF TITLE: Seller shall furnish and pay for an owner’s title insurance commitment and policy…. And shall show in Seller marketable title in fee simple and clear of all liens and encumbrances except: covenants, restrictions, conditions and easements of record that do not unreasonably interfere with present lawful use….

THE RECORDING SYSTEM AND WARRANTIES OF TITLE 1. First in time; first in line 2. Marketable Title Act 3. The indexing system - See #3 4. The undesirability of personal warranties

OFF RECORD TITLE MATTERS See #4 1. Future taxes and assessments 2. Mechanic’s liens 3. Unrecorded interests (options, leases) 4. Survey 5. Mental/legal capacity

PRE-TITLE INSURANCE, ABSTRACTS AND ATTORNEY’S OPINION 1. Creditworthiness of the signatory 2. Review of cumbersome historical information 3. Market forces and title insurance

TITLE INSURANCE COMMITMENT See #5

SCHEDULE A 1. Effective Date 2. Proper Insureds and Amounts 3. Correct Title Holder 4. Proper Legal Description 5. Mailing Address, Parcel Number and Valuations

SCHEDULE B-I Items which need to be satisfied to clear Seller’s encumbrances and vest title in Purchaser ▫Satisfaction of Mortgage ▫Dismissal of Pending Actions ▫Execution of Affidavit

SCHEDULE B-II 1. Generic Exceptions 2. Specific Exceptions

GENERIC EXCEPTIONS 1. Survey Items 2. Mechanic’s Liens 3. Parties in Possession or Items not of Record 4. Recorded Right-Of-Ways 5. Increased Tax Valuations

SPECIFIC EXCEPTIONS 1. Real Estate Taxes 2. Assessments 3. Platted Roads, Easements, Restrictions 4. Financial Matters ▫Prior Mortgages ▫Judgments ▫Public Entity Liens

RECORDING AND ISSUANCE OF FINAL POLICY See #6

COMMERCIAL CLOSING AFFIDAVIT See #7

SURVEY See #8 1. Carefully review and inspect ▫Encumbrances ▫Setbacks ▫Locate Schedule B-II Items 2. Proper Technical Certification Language