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Aziz, Home Buyer in Seattle, WA

Exception clause in title insurance

Asked by Aziz, Seattle, WA Fri Feb 18, 2011

I am in process of buying a house in WA.

The title insurance has a following exception (schedule b section II part two) clause

"We are unable to complete our examination regarding the dissolution of marriage between x and y case # z due to the temporary unavailaibiltiy of such records. A supplemental letter regarding such status and an appropriate exception, if any, will follow."

Any idea what does it means, and how it will impact me if i proceed with closing

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BEST ANSWER
Aziz,
Your question points out the role of the title company and their importance to a real estate transaction in the State of WA. Their current research efforts are most likely incomplete when it comes to the marriage status of one or both of the sellers. If the property was acquired jointly by a married party then it would be necessary for both people to authorize the sale of the house unless a subsequent legal event occured altering the home's ownership. In the case of a divorce, your title provider wants to prove that the seller has full legal authority to sell the home. If access to the necessary records is not available then it creates an 'exception' to your title coverage. A review of the recorded divorce decree by your title officer should clear the item up. If the divorce is not final then it may be a bit more complicated.

Besides talking to your title provider you may want to have your agent contact the listing agent about the issue. Chances are they are aware of the circumstances and can at least provide some indication of where things lie. You may need to file an objection to the 'condition' of the title with the seller within a certain review period to facilitate the return of your earnest money if it became necessary. It would also create a time limit for the seller to respond to your objection and resolve the issue. This really depends on your Purchase and Sale Agreement and Addendums used. So often these kind of technical things can be pushed off while you go about doing your inspection and having the home appraise -.activities that can cost you money. Should the exception not be easily resolved and eventually impede the sale you will have spent time and funds on a home that can't be sold without additional legal action. So seek answers sooner rather than later.

The title company will have the 'last word'. Keep in mind that they are making a liability judgement regarding your title insurance policy coverage. They are not techncally making a legal statement. You may want to have a lawyer review the divorce decree for an opinion as well.

Good luck,
Steve
1 vote Thank Flag Link Sat Feb 19, 2011
Aziz,
Kary is correct; the Title Company will be your best bet for a clear answer. It sounds like they are still researching and will provide a supplemental report once the issue is cleared up. What you probably have is a preliminary report, meaning this is a work in process. Your loan can't close until this and any other issue is fully resolved.
On Monday either you or your agent should call the Title Company and get clarification.
2 votes Thank Flag Link Fri Feb 18, 2011
Call the title company and find out. Their number should be near the top. But my guess is the state's Internet site wasn't working at the time they did the report, or their court access link, and that they will update it later.
2 votes Thank Flag Link Fri Feb 18, 2011
It all worked out.

The title company completed the research and the seller was able to provide the necessary documents. They agreed to remove the exception from the insurance.

Thanks for all your help.
Regards
1 vote Thank Flag Link Sat Feb 26, 2011
Professionals can't render an opinion on behalf of another professional who publish the document. Refer your questions to title company

Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
972-699-9111
http://www.lynn911.com
0 votes Thank Flag Link Sat Feb 26, 2011
See, a lot of worry about nothing! ;-)

Glad it worked out.
0 votes Thank Flag Link Sat Feb 26, 2011
If your title company can't answer your question, talk with a real estate attorney.
0 votes Thank Flag Link Thu Feb 24, 2011
Wow, that should be able to be cleared up with the help of your agent working with the title rep. Let us know the outcome.
0 votes Thank Flag Link Mon Feb 21, 2011
Steve, good point about asking the listing agent. Unlike title company reps, real estate agents work weekends! ;-)
0 votes Thank Flag Link Sat Feb 19, 2011
Everything that everyone already said is so true. Just talk with your title officer. My question is, why did you not just ask your agent the same question? they should have gone over these things with you.
0 votes Thank Flag Link Sat Feb 19, 2011
Feel free to talk to the Title officer as has been suggested. It is common for them to answer these kinds of questions.
Title Insurance may except unrecorded judgments. Hopefullly you did not check any of the boxes in the Optional Clauses Addendum for alternative Title policies. The Alta Home Owner's Policy covers this, I think. Check with the title officer.
Web Reference: http://www.nwhome.us
0 votes Thank Flag Link Sat Feb 19, 2011
Rob wrote: "Washington is a common property state. If the sellers are still married, both would need to be involved in the transaction."

You mean community property state. The second sentence is not necessarily correct if the couple is still married, and problems can still exist even if the divorce is complete.

This may be yet another situation where someone may need legal representation, although in this case it is more likely the seller to clear of some technicality or remove some obstacle. But it's premature to get to that point when we don't even know that there's a problem at all or what the problem might possibly be. That can be determined by talking to the title company, as I suggested below. If it were me I would do that promptly, not only for peace of mind, but also to make sure the seller has plenty of time to do whatever it is they might need to do (assuming they need to do anything).
0 votes Thank Flag Link Sat Feb 19, 2011
Aziz,

Washington is a common property state. If the sellers are still married, both would need to be involved in the transaction. It sounds like that is in question given that the documents cant be found. It may be quite simple but you will want to be sure that you are getting clean title at close. I wouldn't panic yet but talk to your agent and the title company to clear up any confusion.
0 votes Thank Flag Link Sat Feb 19, 2011
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