Changes to FIRPTA Legislation – What’s it mean to you?

Title InsuranceOn December 18, 2015, President Obama signed into law H.R. 2029, which, among other things, amended the Foreign Investment in Real Property Tax Act (“FIRPTA”).  Below is a breakdown of the withholding amounts that will apply beginning February 16, 2016:

  • 0% withholding on the transfer of property to an individual transferee where the transferee or certain members of the transferee’s family (ancestors, siblings, spouse, and lineal descendants) intend to use the property as a residence for at least ½ the time the property will be used by anyone as a residence during the first two 12-month periods following the transfer and the amount realized is $300,000 or less.  This provision is not new.
  • 10% withholding for transactions closing on or after February 16, 2016, where the real property will be used by the transferee as a residence and the amount realized is greater than $300,000 but not more than $1,000,000.  This category is new.
  • 15% withholding on all other transfers by a foreign person.

As a reminder, the requirement to withhold still rests with the transferee.  Any questions by any party regarding FIRPTA, the amendments, or any other tax matter should be directed to that party’s tax professional.

Here are some other details of the bills highlights:

Access Title Agency Expands Offices To Michigan

Karen Kohler, President and owner of Access Title Agency, LLC, is please to announce the opening of a new office located in Suttons Bay, Michigan. 

Karen KohlerThe office is located at 718 N. St. Joseph St., K-2 in the Bayview Complex, just north of the Village.  Access Title Agency also has an office located in Naples, Florida.

Karen states “The office makes perfect sense for us as my husband and I have owned the office condo space since it was built in 2004.  In addition, the synergy between the two states, coupled with staffing who possess the same common values in customer relationships, will allow us to make an impact in the market while providing our clients with the most knowledgeable personnel available.  What this means for our existing customers in Naples, is that during the high volume season, we have additional support available to ensure that you get the same high level of service and responsiveness that has fueled our growth in  our company since it’s inception in 2010.”

The office will be managed by Melissa Herman and staff members will include Jodi Wolfe, Escrow Officer, and Carrie Richter, Processor.  Title examinations will be performed by Mary Ann Kovarik.

Please contact us at 231-539-1203 or mherman@accesstitleagency.com.

Title Insurance Listed as “Optional”

title Insurance folderThe new closing disclosure in October refers to the Owner’s Title Insurance as optional.  It will be important to be prepared to answer any questions that your customer may have and how the insurance protects them and their investment.  In addition, if the Buyer elects to “opt out” of the coverage will you be responsible should something arise down the road for having not advised them?  If the consumer declines coverage after seeing the closing disclosure, the rate structure may change and pose an issue of re-disclosure resulting in potential closing delays.

At Access Title Agency, we have a handout available for you to share with your customers so that they are informed and ready prior to signing the contract.  If they have questions, we are always happy to speak with them on this important issue.

If they elect to decline coverage after reviewing, we will have a disclosure signed by the Buyer that they elected to not afford themselves with this important insurance to protect them and their interest!

Click here for what is title insurance.

Encrypted email is important!

The American Land Title Association best practices recommend that Title Agents adopt and maintain a written privacy and information security program to protect Non-public Personal Information (NPI) as required by local, state and federal laws. Email Encryption is highly recommended because Title professionals are third-party vendors to Lenders and the requirements placed on Lenders by Gramm-Leach-Bliley and similar laws flow through to title and settlement providers.Encrypted email

As a Realtor, you should also demand that your title provider have email encryption to protect your Buyers and Sellers. Title Agents and Attorneys obtain social security numbers for payoffs, tax returns, wire instructions for sending proceeds and other sensitive information. You want to ensure that a breach does not occur with a company you recommended! What a great marketing tool for you to promote to your clients…that you have researched and are looking out for their security and protection to the best of your ability!

Our encryption service at Access Title Agency is smooth, without passwords or links to deal with. In fact 90% of our email recipients will not even notice.

Peace of mind for your and your clients!

Same Sex Marriage and Title Insurance

Are you prepared to discuss real estate and vesting on deeds with your clients since Florida is issuing same-sex marriage licenses?

Read on for one Underwriters perspective.

Old Republic continues to monitor the law regarding same sex marriage, but currently it is still unsettled. Until there is a definitive ruling, our position is as follows:

When both spouses are going into title, you should put their marital status on the deed as instructed. Same sex marriageThey should tell you how they want to take title (i.e., a married couple, married to each other, husband and husband, wife and wife, etc.).

If they do not tell you, you should ask them if they want title vested “as joint tenants with rights of survivorship” or “as tenants in common.” If they do not know, advise them to consult with their attorney to discuss which method adequately meets their estate planning goals for the future. Right now, it is not clear if Florida will be recognizing a tenancy by the entirety (which is automatic when someone takes title as “husband and wife”).

At this point, since we don’t know yet if Florida will be recognizing tenancy by the entireties, judgments against one spouse should be cleared, and a probate will be required if one spouse dies and the grantees did not take title as joint tenants with right of survivorship. If only one spouse is on title, you will need joinder of the other spouse on a mortgage or deed for homestead rights. Commitments should include this in the requirements section if the owner tells you he/she has been legally married in a same-sex ceremony (just like we do now with heterosexual marriages).

OLD-REPUBLIC-TITLE

 

 

 

We are here to help if you have any questions.

 

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Title Insurance Policy Surcharge-NEW!

Have you noticed the new fee being collect on closing statements in Florida?
surcharge feesAs of the first of September, the Florida Department of Financial Division has mandated a surcharge be collected for every policy issued in the amount of $3.28. This charge must be shown as a separate entry on the closing statement and payable to the Underwriter.They are trying to protect the consumer from two failed underwriters (National Title Insurance Company and K.E.L. Title Insurance Group, Inc.) and anticipate that it will take approximately one year to recoup the funds extended.

Please note that it is charged only once per closing, meaning that it would not be charged against an Owner’s Policy and a Mortgage Policy for the same file. It is assessed against the party contractually responsible for the payment of the policy.

What is Title Insurance and How Does it Protect Your Clients

We find many buyers and sellers do not know why Title Insurance is needed and what it actually is. Below is a simple definition of the value of Title Insurance.

 Title Insurance

Title InsuranceAn Owner’s Policy of Title Insurance protects the property owner against any claims that may challenge the ownership.  A Lender’s Policy of Title Insurance protects the Lender’s interest in the property should their lien rights be challenged. If unknown defects should come to light, the policy holder is protected against issues that may result in a loss being incurred. This coverage is provided for a one-time fee that is based upon the dollar value of the coverage being provided.

Unlike other forms of insurance, Title Insurance emphasizes RISK PREVENTION rather than RISK ASSUMPTION. To prevent or minimize the risk, a title search is performed by researching the public records available to determine if defects exist on the property. Some of the defects that could be uncovered are access issues, errors in legal descriptions, unreleased mortgages, missing deeds in the chain of title, tax liens, and judgments. The commitment that is produced following this search will identify said risks and determine the steps necessary to correct or remove them prior to or at closing.

After closing, you will receive your Title Insurance Policy which should be kept for future use by you. Should you sell or refinance your property, the policy may be used by us to save you money towards the cost of a new policy. Be sure to contact Access Title Agency for any future transaction to ensure that you will receive credit.

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Unable to write your name?

When a competent grantor, who is unable to write, executes a deed using a mark, an affidavit should be obtained from the witnesses, stating which of the following:
I. The contents of the deed were read to the grantor.
II. The grantor, by making the mark, consented to the effect of the deed.
III. The mark was made voluntarily.
IV. The mark was made using an “X”.

The answer is I, II, III

For more information on the proper Notarization of someone signing by a mark, please see the attached link http://members.usnotaries.net/news.asp?AssetID=600

Minor Child

Do You Know….

Exam Stress left

 

In a transaction involving a minor, which of the following would suffice for insuring title to real property owned by the minor child, being sold to a third party?

 

1.  Obtain the signature of the natural guardian(s) on the deed, assuming the equity of the minor does not exceed $15,000.00.
2.  Record an Order Removing Minority, showing the minor has been emancipated, and obtain the signature of the minor.
3.  Record a marriage certificate showing the minor is or was a married person and obtain the signature of the minor.
4.  Obtain the signature of the Plenary Guardian of the incapacitated person.

 

a. 1
b. 1, 2
c. 1, 2, 3
d. 2, 3, 4

 

The answer is: c.

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What does “POB” and “POE” mean in legal descriptions?

Point-of-BeginningIn a metes and bounds survey, the location of the starting point is referred to as the Point of Beginning or POB, which should be exactly  the same as the Point of Ending or POE.  Some surveys will only refer to the Point of Beginning and then return to the Point of Beginning rather than referencing this as the Point of Ending.  Either way, this will create a closed tract of property, provided that the proper calls or dimensions have been met.  If the description does not “close”, there could be a defect of the legal description.  If the intent of the description is obvious, some states have Title Standards that allow for clear title if the incorrect description was contained in a legal on a deed.  If the intent of the legal description can not be determined, then a corrective deed may be required.

 

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