A Ticket to Ride

In 1965, it was the year for graduation (mine, from Choctawhatchee High School), and the year the Beatles sang about “A Ticket to Ride”. No one would have looked closely at the ticket because, except for the destination, all bus tickets were the same. There were no assigned seats.

This article is written to real estate buyers and to the realtors who represent them, and it’s about tickets that are not always the same. Too many times I see realtors and buyers treating their Title Commitment like the Beatles’ Ticket to Ride - as if it doesn’t matter what the policy says; they all make the closing happen, and they are all the same. If you believe that, please go now and order your financial headstone. Your ride in this business will be short.

Buyer, examine a title policy in context. When you go to a Florida real estate closing, there will be laws that affect your closing, and there will be a small mountain of paperwork. Ironically, you will have paid for all of the paper. Those laws and that paper are designed to assure that the professionals at the closing table have no liability. That means that the closing agent (a professional) will disclose exactly what the buyer is buying, because to do otherwise might create closing agent liability. The contract you signed will assure the real estate agents (professionals), that they have no liability. Unless you bring your own lawyer, the only person at the closing table with a legal duty to look out for the buyer, is the buyer himself.

Every title policy has a Schedule A. Schedule A tells you the owner’s name, the property’s legal description, and other “stuff” not likely to be wrong. But every one of us has seen contracts assigned at the eleventh hour to the buyer’s trust or to his LLC, or even to a spouse. Many closings have ended with an insured individual buyer and a deed into a different owner. That owner is uninsured.

If your survey is ordered the day a contract is signed, there is no way the title research can have been completed and its information sent to the surveyor. The surveyor cannot possibly know things that will be revealed by the title search but are not apparent on the ground (such as an easement), and therefore no easement can be shown on the survey, even if that easement is critical to use of the property. The value of that survey will be largely wasted.

The legal description of the insured property is critical to the policy. Yet many times contracts don’t contain the full and accurate description. Therefore, sometimes a closing agent won’t be totally clear on the property to be conveyed. An inspection of the title policy’s first page will reveal an error in something a buyer absolutely must know, sometimes including confusion about the legal description.

But reading only Schedule A is like reading only the subject line of an email. This first page is only the passage into the heart of the policy. Inside, in Schedule B-1, in the policy jacket, and in any endorsements, you will find the reason for your deeper plunge into the title policy. Everything that makes this property different from what you see on the ground is located in these pages and on the survey. These are the exceptions to the absolute assurance of title that you got on Schedule A.

The lesson here is that which is given in Schedule A can be taken back again in other parts of the policy. Again, you must understand your title policy; the only person at closing with a legal duty to look out for you, is you.

Your title policy is a complicated contract and your understanding is vital, unlike the Beatles’ bus ticket, every title policy is different from every other.

This article was published in the Coastal Homes publication of the Northwest Florida Daily News on August 3, 2019: http://www.coastalhomesfla.com/Olive/ODN/NWFLDNCoastHomes/