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I am trying to purchase a land property in the county of Sussex, NJ and I am having somewhat trouble in regards to title insurance. I would greatly appreciate some assistance on this.
Property belongs to an estate sale, and the current/deceased owner obtained this property by means of a tax certificate. I am purchasing the property with cash instead of mortgage due to the nature of the sale on it being an estate sale and them wanting the least contingencies possible.
I was able to enter the attorney review and the attorney ordered the title search so to assure we could have the property title insured. After the title search came in, it looks as if they cannot find chain of title; they see that the property was sold many times through tax certificates OR it has had tax certificates in the past since the 1940's it looks like, and the owner prior to these tax certificates is specifically written as "unknown" when these tax certs were issued.
The current/deceased owner obtained the tax certificate in the year 1984 it looks like and he foreclosed on the property in the year 2000, and obtained deed. Taxes are current on property.
My problem is that the tax searcher wants an incredible $1,000.00 minimum!! to do the necessary research far back in the 1800's to see who the owners were, etc. The title company is also concerned with the title having past certificates that could be redeemed or that someone can come back and claim..which I highly doubt, but don't know what protects me in this case. The property has been foreclosed and has deed since the year 2001.
My questions are:
1. Are all title insurance companies equal in terms of the insurance they can grant and to what type of title?
2. Is $1,000.00 minimum fair for a title search, what can I do regarding this? Does anyone know of a title searcher that might charge cheaper or do a favor in assisting me?
3. What are the chances or limitations where someone can come back and put a claim on the property or claim an old tax certificate on the property? Is there a law that might protect me.
4. Any recommendation/suggestions, etc?
For those reading this, I really appreciate it and Thank you for your time.
Fees, real estate law and procedures vary greatly from state to state and city to city. That is a tough one for anyone here to offer advice on. I think only a real estate attorney can offer any constructive advice on this. Tough situation to say the least.
1) Basically all purchaser title policies are similar.
2) Price- whatever is agreed upon. What they need to do is a long, arduous task. They've got to delve into the transfer of the property going far back. Those old, old records are not computerized and involve looking through old, musty volumes containing hand written script. Trying to figure out those old transfers can be quite the challenge.
It may take a couple-few days to gather and copy the records, figure out the chain of title, then another day or two to write up the chain of title. Is someone going to do you, a total stranger to them, a favor and do it for free or cheap- NO
However, there is more than one title company. You can call around and comparison shop prices.
3) Can someone, like an unknown heir come back and challenge your ownership if you don't get title insurance. Anything is possible. No law protects you. The title policy is your insurance. That's why the title company is being so careful. They're legally and financially on the hook if anything goes wrong with a title they have insured.
Talk to a few title companies and compare what they charge and how they want to approach the problem. Then decide how you want to proceed.
Thank you for being informative Willow wind. In regards to an attorney...I have one which is why I mentioned the attorney review but honestly, these attorneys don't know all the rules in the book and even though he is a real estate lawyer, he is not going to represent me if he sees there is a risk regarding the title.
Willow Wind, I am going to do exactly what you said in comparing title companies. One important thing I would like to know is, what happens if one title company cannot insure my title, is there a possibility another company might take the risk?
I really appreciate any added suggestions or ideas. Thank you.
Did the attorney specifically state he would not represent you if there is a "risk" with the title? and how can you presume that a r/e attorney doesn't know the real estate laws in the state in which s/he practices. I think you have jumped to at least one faulty conclusion. I was a title examiner many years ago in another state, although I am somewhat familiar with NJ having begun as a legal assistant there before moving.
The laws regarding tax titles are quite specific and have a finite number of years during which they can be redeemed by the original owner. There is a procedure by which you can "quiet title" which means getting a court to certify that the current owner (the estate) has the right to sell you the property. YES, it does take a lot of extra time to search the title back to a Warranty Deed or other clear proof of ownership, ergo the higher search costs.
I suggest you discuss the issues with the attorney you have already hired or else find yourself a specialist in quieting titles. You may even reconsider this purchase absent the ability to provide a quieted title or warranty deed.
I am trying to purchase a land property in the county of Sussex, NJ and I am having somewhat trouble in regards to title insurance. I would greatly appreciate some assistance on this.
Property belongs to an estate sale, and the current/deceased owner obtained this property by means of a tax certificate. I am purchasing the property with cash instead of mortgage due to the nature of the sale on it being an estate sale and them wanting the least contingencies possible.
I was able to enter the attorney review and the attorney ordered the title search so to assure we could have the property title insured. After the title search came in, it looks as if they cannot find chain of title; they see that the property was sold many times through tax certificates OR it has had tax certificates in the past since the 1940's it looks like, and the owner prior to these tax certificates is specifically written as "unknown" when these tax certs were issued.
The current/deceased owner obtained the tax certificate in the year 1984 it looks like and he foreclosed on the property in the year 2000, and obtained deed. Taxes are current on property.
My problem is that the tax searcher wants an incredible $1,000.00 minimum!! to do the necessary research far back in the 1800's to see who the owners were, etc. The title company is also concerned with the title having past certificates that could be redeemed or that someone can come back and claim..which I highly doubt, but don't know what protects me in this case. The property has been foreclosed and has deed since the year 2001.
My questions are:
1. Are all title insurance companies equal in terms of the insurance they can grant and to what type of title?
2. Is $1,000.00 minimum fair for a title search, what can I do regarding this? Does anyone know of a title searcher that might charge cheaper or do a favor in assisting me?
3. What are the chances or limitations where someone can come back and put a claim on the property or claim an old tax certificate on the property? Is there a law that might protect me.
4. Any recommendation/suggestions, etc?
For those reading this, I really appreciate it and Thank you for your time.
In NJ Title search & insurance is a regulated industry. All search and examination fees, recording fees, premium endorsements and transfer taxes are state regulated, and will not vary from company to company. The only way to save on the search fee would be to not do the search, and I don't know anyone who would ever recommend that. What does your attorney say?
ENJ,
If a title company won't insure the title, DO NOT BUY the property.
Sometimes we want something, we think we are getting a bargain.
But it may not end up being a "bargain" if the property doesn't have a
clear title.
No title company insurance, no sale. Period.
It sounds as though there may be fraud involved with this property.
I think you should look for something else.
While title search, fees, etc are mostly regulated, most of the regulation applies to the mortgage banking business. The OP is not mortgaging his property.
He has a unique situation. In his case, title insurance is simply his choice. He does not need to buy it in order to purchase.. He also has a strange and unusual property that requires an extensive search. A title search for the typical bank loan is a simple thing. It usually only goes back about 40 years, is pretty straight forward and takes little time. Since most records are computerized that far back, it's a fairly simple and quick task. It might only take an hour, if that.
That why is only costs- let's throw out a number just for the heck of it- say $100.00 for the search. We won't include the cost of the title policy yet. However, no one is going to spend a few days or a week unraveling a mystery for the same fee as a simple search. Not going to happen. A title company couldn't afford to stay in business if they did that. This is why there will be variation in his fee for this.
That leaves the OP with maybe four choices. Pay and try to find and create a clear chain of title , try to spend the money & court time to " quiet" the various aspects of title as another poster suggested, forget a title policy and take his chances or walk away from the whole thing.
OP needs more consultation time with his attorney, assuming he has a good real estate attorney.
Providing good title should be the obligation of the Seller. They will need to deal with the issue regardless of whom the purchaser may be. Any offer of yours to purchase the property should be conditioned upon them providing good and clear title (it's unclear where you are in the process).
In Michigan, it is customary for the Seller to pay for the title insurance policy. Even if that is not the case in New Jersey, it is still, almost certainly, a negotiable item.
One option that might be possible would be the filing of a suit to Quiet Title. Ask your attorney about that. Also ask whether New Jersey has any statutory limitations on the length of time one has in filing a claim against the title. I believe that some states have 30 or 40-year limits on certain claims against the title.
In any case, clearing the title should be at the Seller's expense. If you choose to take that on yourself, you should at least negotiate a significant reduction in price to more than offset those anticipated (and sometimes unpredictable) costs. And do NOT close until the title issues are resolved.
Last edited by jackmichigan; 07-14-2013 at 04:26 AM..
As jackmichigan stated, dealing with the title should be the seller's problem, not yours. I would tell them to handle the title issues so they are giving you a good clear, insured title. If they refuse, walk away.
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