GREC REnews, Vol. 3, Issue 7 (July 2007)

Georgia Real Estate Commission
GREC RENEWS

Volume 3, Issue 7 July 2007

2007 Dates to Note
August 2-3, 2007 Georgia Instructor Training Workshop (GIT) Atlanta, GA
October 18-19, 2007 Georgia Instructor Training Workshop (GIT) Macon, GA

GREC Disciplinary Sanctions

INSIDE THIS ISSUE:

Title Policies

1

Title Resources

2

Focus on Terminology:
"Gore"
Georgia Real Estate Commission Suite 1000, International Tower 229 Peachtree Street N.E. Atlanta, GA 30303-1605

Title Policies: From a Practical
Perspective
When a buyer has a property under contract, a title commitment is ordered and the buyer has the opportunity to object to or accept certain title issues as clarified in the purchase agreement. Once the property is purchased and the buyer/owner holds title, then the actual title insurance policy is issued.
When reviewing the closing statement for a residential transaction, the buyer often thinks he/she is paying for title insurance that will protect him/her when in fact the policy is to protect the lender. The lender is protected for the outstanding loan balance in the event a defect in title is found that should have been discovered before closing. In order for the buyer to be protected for the purchase price including equity and down payment, the buyer must purchase Owner's title insurance for the amount of the purchase price. There are two main types of title insurance polices for real estate:
1. Lender's Title Insurance 2. Owner's Title Insurance
A title policy is designed to insure the policy holder that he/she has purchased good and marketable title. However the title company will not insure those exceptions to title that are of record. In other words, if there are deed restrictions, easements or other items recorded against the property, the title company will not be responsible for claims against them. If it is of record, it is basically public knowledge. Therefore, the buyer can save a lot of time and energy by researching existing issues of record before making an offer.

American Land Title Association and Title Resources

The American Land Title Association (ALTA) is a national association of the title insurance industry. Nearly all title companies and most title agents are members of ALTA. ALTA serves to establish standards for searching land title records and preparing insurance documents. In a sense ALTA

"regulates" the land title industry itself. Their basic purpose is to eliminate as much risk as possible before purchasing or insuring land and therefore try to avoid title problems altogether. 1

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Georgia Real Estate Commission
Suite 1000, International Tower 229 Peachtree Street N.E. Atlanta, GA 30303-1605
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Title Resources

Volume 3, Issue 7 July 2007

... continued from page 1
Many real estate contracts actually refer to ALTA and its standards of issuance when stating that the title must be good and marketable. "Marketable Title is defined by ALTA as" A title which a court of equity considers to be so free of material defects and liens that it will force the title's acceptance by questioning purchaser. Also known as a merchantable title."
Contracts may also state that an "ALTA/ACSM Land Title Survey," is required. The American Congress on Surveying & Mapping (A.C.S.M.) works in cooperation with ALTA, national title companies and the surveying profession to set standards for surveying in mapping. Surveys must be done to certain specifications to comply with ALTA requirements.

Resources: The ALTA web site, www.alta.org has useful information for homebuyers and consumers. ALTA has a section of frequently asked questions about title insurance: http://www.alta.org/consumer/questions.cfm

A.C.S.M. American Congress on Surveying & Mapping
"The American Congress on Surveying and Mapping (ACSM) was founded in June 1941 and is incorporated as a non-profit educational organization whose goal is to advance the sciences of surveying and mapping and related fields, in furtherance of the welfare of those who use and make maps." http://www.survmap.org/

Focus on Terminology: "Gore"

An assemblage of two or more pieces of property can be a time consuming and perhaps daunting task. Not only does the licensee have to negotiate an agreement that all the owners involved with ultimately agree upon, but it is important to confirm that the properties are truly contiguous. Contiguous properties have common property lines so there is no gap in-between parcels. If there is a gap between two or more described parcels, it could result in a major development problem unless the issue is resolved, particularly if a third party sees an opportunity to obtain title or hold on to the undescribed property and negotiate for a fee.
The gap of property that perhaps has no owner identified with it or is merely an error in the descriptions of the surrounding properties is sometimes called a gore.

Parcel A

Parcel B

Gore

GREC

Parcel C 2