Title Insurance
Good morning , Can anyone enlighten me on exactly what I need title insurance for in this particular case . Sure I understand there are times when you certainly need it ,, and other times a lender requires it ,, But here is my case . I purchased an oceanfront condo in July 2004 from the original owner , Condo was built in 1991. Purchased it in the name of an LLC (personally guaranteeing the note ) I purchased title insurance (naturally) I have owned this property since July 2004 and am 100% current on the mortgae payments and I know that I have had NO emcumberances placed on this property by me. Now some 28 months later I am going to Quit Claim the title from the LLC to my personal name in order to pull out an equity LOC from it as the lender will not do a LOC for the LLC. Fine ... The attorney is sayng that I need new title insurance because the old policy only covers the LLC and not me personally .. Fine ,,, but I am thinking ,,, what do I need it for ,, I mean ,, after 28 months no problems with the title have surfaced ,, and from what I know of the original owners there never will be. I feel as if I will be throwing away some $ 1500.00 for another title insurance poolicy for a property that I am 100% comfortable that their are no pbolems with this title . If the bank requires it ,, my opinion on this matter is a moot point ,, (will they ? ) otherwise Id just as soon say the heck with it . Am I missing something here about title insurance and would I be doing ( another) dumb thing by rejecting it in this case ? Would appreciate any advice I could get from thoses who know about such things ,, Thanks very much , Dave
[ Edited by Powerlifter on Date 09/20/2006 ]
The lender will absolutely require it. The only way for them to protect themselves is to purchase a lenders policy. They have no way to know if there are any defects to title, and you have no way of knowing for sure there has not been anything either.
You should have the title insurance policy endorsed over to your name, otherwise should you have a claim after the transfer the title insurance company could refuse to pay. However, do not just pay for it. Ask the title insurance company that issued the original policy and let them know that you are transferring the property out of your LLC and into your own name. The fact that the LLC is yours (a single member disregarded entity) they may endorse the policy at no cost or at least offer a special pricing.
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Two years is too long to transfer the other title policy. You will definitely need a new one. Transferring the property from the LLC to yourself is the same as a purchase in the eyes of the bank. Title insurance is not costly so decide if it is more important to quibble or to get the LOC
Remember. Title "Insurance" is a legal scam. Even if something was wrong, they problably wouldnt pay, blame it on the realtor or something.
You just need to pay it, like a transaction fee. You really do get nothing from it, just the lender. Like "PMI", wasted money for nothing. How many mortgages ever got paid off from "PMI"....duh the home is the Asset they forclose on...PMI, like Title Insurance is a scam the real estate industry wont let go. But I guess back in the 1930s these items were necessary....
Ok so should it be a single member LLC that is owned by the Corp or should I be the sole member. i really dont want to have to set up a LLC for every property that i get thats why i was told to do the LLC holding and then owned by the Corporation
From my reading and after talking to an attorney the delaware corp i believe has a pocket llc for asset protection. Check with your attorney
My personal residence is jointly owned in a land trust by my wife and I as a single beneficiary and my LLC as a co-beneficiary.
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Quote:
On 2006-11-06 16:53, ctsee11 wrote:
I think you would lose your homestead exemptionif you transfer your personal residence into an LLC. Check with your attorney.
In Washington the homestead exemption is only $40K.
Not much with todays high home prices.