The agent must first determine that equitable interest estates have priority in their area. If not, the property may not be insured without specific instructions from Agents National Title’s underwriting counsel.
1. Review the contract to ensure that:
a. All parties to the transaction are specified;
b. All parties have properly executed the contract in written form;
c. The terms and consideration of payment have been detailed within the body of the instrument;
d. The sales price is an adequate consideration;
e. The contract contains the legal description of the property and meets all statutory requirements.
2. To insure the purchaser/vendee under the contract seller/vendor’s interest:
a. List the name of the contract purchasers/vendees on Schedule A of the policy under “Name of Insured”, referencing only their names and not marital status or other vesting information.
b. List the estate or interest as insured as “Fee Simple”.
c. List the title as vested in the name of the contract seller/vendor as contained in the last deed of record. d. Exceptions as shown below.
3. To insure the vendee’s interest only:
a. List the name of the contract purchasers/vendees on Schedule A of the policy under “Name of Insured”, referencing only their names and not their marital status or other vesting information.
b. The estate vested should conform to the following language: “___as to the rights created by that certain [TYPE OF INSTRUMENT including description of sellers, purchasers, date, and recording information.]”
c. Under the Estate or Interest, list the following: “The interest of [CONTRACT PURCHASER(S) VENDEE(S)], under that certain [TYPE OF INSTRUMENT] referred to in Schedule A, and the effect of any failure to comply with such terms, covenants and provisions.”
d. Exceptions as shown below.
Some buyers and/or sellers may
object to recording the actual contract for deed and making the terms of the sale public. At
the very lease, a memorandum or notice of contract must be filed in order to
insure the transaction. Generally, unrecorded contracts are uninsurable.
The following exceptions must be included under Schedule B-1 of the policy:
“Those terms, conditions and provisions under that certain [TYPE OF INSTRUMENT] referred to in Schedule A, and the effect of any failure to comply with such terms, covenants and provisions. “Subject to the rights, title and interest of the fee simple title holder, pursuant to the [TYPE OF INSTRUMENT] referred to in Schedule A.”
If the contract seller(s)/vendor(s) are in possession of the property under an unrecorded contract, and the property is not being transferred, and the contract purchaser/vendee(s) are obtaining financing, the following requirement should be made in the lender’s title commitment.
“NOTE: It
has been brought to our attention that {CONTRACT SELLER(S)/VENDOR(S) are in
possession of the subject property by virtue of a certain {TYPE OF INSTRUMENT],
joinder of said {CONTRACT SELLER(S)/VENDOR(S)] on the mortgage, or a written subordination of their
rights to the lien of the insured mortgage is required.”
Before a contract for sale or agreement for deed may be ignored, the owner of the equitable title must properly release his interest, the contract seller/vendor must foreclose, or a court order quieting title must be obtained and approved by ANTIC Counsel.
See also: