•
Bankruptcies
•
Business trusts
•
Clearing liens and judgments, including child or spousal support liens
•
Encroachment or off record easements
•
Establishing fact of death–joint tenancy Family trusts
•
Foreclosures
•
Physical inspection results–Encroachment, off-record easements
•
Probates
•
Power of Attorney–Use of, proper execution
•
Proper execution of documents
•
Proper jurats, notary seals
•
Recent construction
•
Transfers or loans involving corporations or partnerships
•
Last minute change in buyers
•
Last minute change in type of title insurance coverage
TAXES:
These are usually standard, showing the status of the
current tax year.
RED FLAG:
Postponed property taxes is a program put on by the
state for senior citizens. It allows the owner to postpone the
taxes until the property is sold or refinanced. The owner applies
to the state, and the state provides “checks” that the owner
uses to pay the taxes. The reason this is a red flag is because a
demand will need to be ordered from the state by escrow in
order to pay off the postponed taxes. It may take up to two
weeks to get a demand.
CC&R’S:
These are standard. The CC&R’s should be provided to
the buyer within the title report. The buyer should read these
thoroughly, especially if improvements to the property are
contemplated.
RED FLAG:
Some CC&R’s prohibit certain types of
improvements.
EASEMENTS:
These are also standard. Most easements in newer
subdivisions (20 years or less) are contained in the street. Some
subdivisions have nonexclusive easements over portions of the
property for such things as maintenance of side yards, access to
common areas (like golf courses), etc.
RED FLAG:
If improvements are contemplated (such as
construction of a pool or spa for example), then the buyer
should determine that there will not be any interference
to contemplated improvements. However, you should be
aware that easements are very difficult to get removed, and
your client may be better off with another property if an
easement interferes with his future plans for the property.
AGREEMENTS:
These commonly take the form of road
maintenance agreements, mutual easement agreements (like
a shared driveway) or improvement agreements, and will
bind the owner to certain actions. A copy of the agreement
should be requested from title and provided to the buyer.
It is the buyer’s responsibility to contact their own counsel
if they do not understand how the agreement would affect
them.
A “red flag” is a signal to pay attention! Below are some of the items which may cause delays or other problems within a
transaction and must be addressed well before the closing.
27
RED FLAGS IN THE ESCROW / TITLE PROCESS




