Millennium Title News and Title Policy Podcast

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Have you heard about the Millennium Title News? Also, if you are buying and selling commercial real estate, a title company’s role is critical—and trust in a title company needs to be a significant factor.

When Jim Kelley of Champions DFW Commercial Realty hosted this episode of his radio show, Julia Barth returned to share her insight on Millennium Title’s breaking news, and Julia discussed title policy, property tax liens and much more. This is an excerpt of their conversation…

Jim Kelley: Why is it so critical and so important, when I’m buying or selling a piece of commercial or residential real estate, that I have a title policy?

Julia Barth: That’s a good question. If you look at what we were just talking about, the people that purchase title insurance policies will have protection against claims that might arise from unpaid liens. Not just the pure alleged fraud issues there, but there are title companies who don’t do their job correctly, and they may miss liens and not pay them off at closing. Then when you buy the property, it’s subject to the lien that’s in place. So you could owe $200 for a mowing lien. You could owe $80,000 in unpaid property taxes. You could owe ABC company $2,000 on a lien that just wasn’t paid off if they missed it. Accidental things occur. So your title insurance policy will…what it is, it is a one-time insurance policy.

It’s issued one time. It is never renewed. It doesn’t have to be. It gives you coverage for the life…for the length of time that you continue to own that piece of real estate. So you buy it, and also if you get a loan, your lender will require it. You will not get a loan for a piece of real estate without a title policy. So what happens is the lender requires it, or if you pay cash, I strongly urge you to buy one because it’s about 1% of the cost of real estate. It’s not very expensive cost, but it gives you basically blanket coverage against any kind of liens, and I’ll give you some examples of that. But when we close a piece of real estate, we collect money for the title insurance policy. We issue a policy in the name of the lender, a lender’s policy. We will simultaneously issue a policy for the borrower or purchaser, and that simultaneous issue on residential is very inexpensive. I think it’s $100 right now, and for commercial its a few hundred dollars. So it’s just insane not to buy the simultaneously issued policy.

So everybody buys one when it comes to that, but if they’re paying cash for real estate they don’t have to. Some people elect not to get the policy. That’s what I mentioned in the earlier segment. Those folks that elected not to buy a policy? They could be in trouble from those closings over at Millennium Title. In addition to the problems that occur from closing a real estate transaction with a title company that either commits fraud or makes errors, those claims are actually relatively rare. The fraud is definitely rare. Mistakes at a title company are not overly common, but they happen. The title company will typically stand up immediately and pay the claim. In fact, we have a legal obligation to pay claims and manage claims within 30 days. We can’t delay, or we could lose our license to sell insurance.

So the real reason title insurance was invented was historical claims that you would see. Claims that arose, and let me make this caveat. The policy is issued at closing, and the time period it covers is not forward, but backward. So when I issue a policy, it is from the day of closing for anything that occurred that day backwards in time to the beginning of time. So that’s why you don’t have to ever reissue it, right? Because once you buy it, if you are the cause of a lien in the future, then that’s your problem, not the title company’s problem. But if when you buy it, I’m telling you because I’ve done the research, this title is clear. Then I’m going to give you insurance for that, or you’re going to buy insurance for it, and we’re going to cover it from the day you got it all the way back. Because that’s what we research.

Listen to the complete conversation and hear more about the Millennium Title news in the podcast below.

In addition to our website, visit Champions DFW on iTunes for a complete archive of podcasts on commercial real estate.

Get to know Jim Kelley, here.


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