What is a Living Trust?

A Living Trust is a type of trust that is used to hold the personal assets of an individual during their life and then distribute those assets after their death without the necessity of a probate proceeding.  In a Living Trust, the assets of the person creating the trust, known as the Settlor, are placed into the Trust to be managed by a Trustee for the benefit of the Settlor.  The Settlor may name themselves as the initial Trustee and someone else as a Successor Trustee to manage the assets following the death or incapacity of the initial Trustee.  In order to retain the homestead exemption for tax purposed, language must be included in the Trust that the Settlor retains the right to occupy the property as their principal residence.

 

If you would like to use a knowledgeable title company conveniently located in the Heights, please give us a call.

Fidelity National Title, 1512 Heights Blvd., Houston, TX 77008 (713) 529-8800.

 

HCAD and Real Property Accounts

We often get calls about why the Harris County Appraisal District (HCAD) shows someone other than the actual owner of the property as the owner in HCAD’s system.  HCAD is an agency created by Texas statute that has the responsibility of determining the value of property for taxation purposes, as well as any tax exemptions that may apply to the owner or the property.  HCAD does not determine the ownership of property.  By law, documents affecting title to real property must be filed in with the County Clerk in the county in which the property is located.

HCAD updates their records based on “Request To Correct Name Or Address On A Real Property Account” forms that are submitted to HCAD or by conducting a separate search of the real property records.  In instances where no form is submitted, any change in HCAD’s records is dependent on the frequency with which HCAD searches the real property records and the accuracy of the person transcribing the information.  Based on the potential delay and/or transcription inaccuracy, purchasers of real property are encouraged to provide HCAD with a completed form in order to have HCAD update its records with correct information.  The form should be completed and submitted to HCAD shortly after the change in ownership to allow the new owner to receive any notifications sent by HCAD or applicable taxing jurisdictions.

If you would like to use a knowledgeable title company conveniently located in the Heights, please give us a call.

Fidelity National Title, 1512 Heights Blvd., Houston, TX 77008 (713) 529-8800.

What is a MUD?

A Municipal Utility District (MUD) is an entity authorized by statute or the Texas Commission of Environmental Quality (TCEQ).  The primary function of a MUD is to provide water, sewer, and stormwater drainage services in areas where municipal services are not available, as well as trash collection, recycling and emergency services within the MUD boundaries. MUDs are typically financed through the sale of bonds which, in turn, are serviced by the taxes levied and collected by the MUD.  MUDs also have authority to condemn property through eminent domain and establish easements to install, inspect, repair, and maintain distribution and collection lines.

If you would like to use a knowledgeable title company conveniently located in the Heights, please give us a call.

Fidelity National Title, 1512 Heights Blvd., Houston, TX 77008 (713) 529-8800.

Is there a title policy discount for refinancing?

Is there a title policy discount for refinancing?

The Texas Department of Insurance (TDI) sets the premiums for title insurance policies issued for property in the State of Texas.  TDI does allow discounted rates for refinances of existing mortgages that were previously insured.  The amount of the discount is based on the length of time between the mortgage being refinanced and the new mortgage, as well as the payoff balance on the mortgage being refinanced.

The discount is calculated by multiplying the base policy premium for the principal balance of the payoff loan by a percentage to come up with the credit, and then subtracting that credit from the base policy premium for the amount of the new loan.  For refinances within the first two years of the existing mortgage, the percentage for calculating the credit is 40%.  The percentage decreases by 5 for each subsequent year to year 7 (at 15%).   After year 7 the discount does not apply.

If you are thinking of refinancing and would like additional information about this discount, please contact us.

Fidelity National Title, 1512 Heights Blvd., Houston, TX 77008 (713) 529-8800

Entity Closings

When closing a transaction where the buyer or seller is an entity, such as a corporation, LLC or partnership, the title company will require documentation to that the entity is authorized to conduct business in Texas and to establish that the person signing on behalf of the entity has authority to do so.  This documentation should be kept in the normal course of business for entities.  The names of the forms may vary by entity type.

The title company will require a copy of the Certificate of Formation (regardless of the type of entity) and a copy of the By-Laws (corporation), Operating Agreement (LLC) or Partnership Agreement (partnership).   The Certificate of Formation sets out the name and relevant parties who are affiliated with the entity.  By-Laws, Operating Agreements and Partnership Agreements set forth the details of how the entity will operate.  The Certificate of Formation must have been filed with the Texas Secretary of State and the entity must be in good standing with the Texas Comptroller’s Office.  In addition, the title company will require a resolution from the corporation or LLC which indicates that the transaction has been approved by the party or parties authorized to approve such transactions in the By-Laws or Operating Agreement and which further designates the person or persons who are authorized to execute the documents to complete the transaction.

There are a number of companies that offer to help individuals incorporate by completing and filing the Certificate of Formation with the Secretary of State.  The Secretary of State also allows for filing through its website.  The Secretary of State does not – and companies offering filing services may not – provide By-Laws or Operating Agreements, so consultation with an attorney whenever you form an entity is always advisable.

If you would like to use a knowledgeable title company conveniently located in the Heights, please give us a call.

Fidelity National Title, 1512 Heights Blvd., Houston, TX 77008 (713) 529-8800.

Multiple Owners

When property is owned by multiple persons or entities, all those with an ownership interest must join in the sale of the property in order to convey clear title to the purchaser.  The most common scenario with multiple persons in title is property owned by spouses.  Both spouses must sign the deed to transfer the property.

Another scenario that is not uncommon is property that has been inherited by the heirs of the record title owner.  All devises under the Will, or if the deceased owner had no Will, all heirs at law, must execute the deed to transfer clear title to the property.  If one or more persons is unable to cooperate, or refuses to do so, the sale cannot move forward unless a lawsuit is filed to force the sale of the property.  A lawsuit to force the sale of property when not all parties are in agreement is called a Partition.

In a suit for Partition, the Court is asked to first determine if the property is able to be divided among the heirs.  For properties that are large, division of the property into smaller pieces may be possible.  For residential properties, the Court will typically decide that the property is not a candidate for division and order that the property as a whole be sold and the proceeds split among the heirs.  The court will appoint an appraiser to determine the value of the property and a receiver to handle the sale of the property.  The costs associated with both the appraiser and receiver will be deducted from the sale proceeds before the proceeds are distributed to the heirs.

If you would like to use a knowledgeable title company conveniently located in the Heights, please give us a call.

Fidelity National Title, 1512 Heights Blvd., Houston, TX 77008 (713) 529-8800.

 

Appraisal Districts

Under the Texas Constitution and statute, each County Clerk is responsible for recording documents affecting title to real property within their county.  In other words, the County Clerk is the official place where deeds and liens affecting title are recorded.  When you purchase a piece of property, the title company sends the deed and any deed of trust to the County Clerk for recording.   Documents filed with the County Clerk are public records, but not always accessible online.

People often confuse the Appraisal District as the official source of property ownership.  Appraisal Districts are set up by statute for the purpose of assigning a value to property for taxation purposes.  Information regarding who owns property is obtained by the Appraisal District by either searching the records of the County Clerk or being notified of a change in ownership by the new owner or their representative.  Most Appraisal Districts have a specific form that must be completed and submitted to indicate the transfer in ownership.

Your title company may provide you with the Appraisal District’s form to indicate a transfer in ownership, but the title company cannot simply submit the information for you.  If the information regarding the transfer of ownership is not submitted to the Appraisal District by the new owner, then the Appraisal District’s records will not be updated until the Appraisal District locates the deed into the new owner during a search of the County Clerk’s records, which may be several months after the closing.

If you would like to use a knowledgeable title company conveniently located in the Heights, please give us a call.

Fidelity National Title, 1512 Heights Blvd., Houston, TX 77008 (713) 529-8800.

 

What is a Subordination Agreement?

            Liens against property (such as mortgage liens, tax liens, judgment liens, etc.) in Texas are given priority either by statute or by filing date.  The general rule of priority is “first in time, first in line.”  Statutory provisions may give some liens, such as tax liens or purchase money liens, special priority.  Occasionally, a lien holder who is in a better position may agree to take a position behind a new lien holder.   This agreement is called a Subordination Agreement.  The Subordination Agreement sets out each of the liens involved in the agreement, as well as a description of the property that is collateral for both liens and the consideration that the subordinating lender accepted in order to complete the agreement. 

If you would like to use a knowledgeable and reputable title company conveniently located in the Heights, please give us a call.

 

Wire fraud is on the rise!!

                     Did you know that wire fraud is on the rise?

Wire fraud If you receive an email that appears to come from the title company and it contains wiring instructions, or if you’re an agent and your CLIENTS receive an email containing wiring instructions that appears to come from you or the title company, call our office at 713-529-8800 to verify that the wiring instructions are legitimate.

           Let’s work together to combat wire fraud and protect everyone from potential financial loss.