The signing of documents for a real estate closing typically occurs at the office of the title company for several reasons.  First, it lessens the possibility of fraud or a later claim of fraud or incapacity in the execution of the documents because an employee of the title company actually witnesses the signing and notarizes any documents requiring notarization.  Second, many lenders, and state law in some circumstances, require that the documents be executed at the title company office.  Third, it is often more convenient for the parties (and expedites the funding of the transaction) because it eliminates the need to print or receive the documents, locate a notary to notarize any required documents and return the signed documents to the title company.  Title Companies do understand, however, that there will be situations where individuals cannot make it to the title company office and other arrangements need to be made.

One option that is available is an outside notary.  Because not all notaries are familiar with real estate documents, title companies typically require that any outside notary be approved by the title company.  The title company will vet the notary or notary service for their experience in handling real estate documents, as well as their errors.

 

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.

 

 

Title companies often receive requests to allow one or more parties to a real estate transaction to sign documents through the use of a Power of Attorney.  A Power of Attorney is a written document in which an individual, called the Principal, gives authority to another individual, called the Agent, to act on the Principal’s behalf.  In Texas, Power of Attorney used in a real estate transaction must be recorded in the Real Property Records of the county where the property is located.  The Power of Attorney may be in the form of a Statutory Durable Power of Attorney or a specific Power of Attorney.

The Statutory Durable Power of Attorney is set forth in the Texas Estates Code and a form of this document is typically easily located online.  The Statutory Durable Power of Attorney contains a laundry list of powers that may be given and requires the person completing the form to make a number of selections within the document itself.  Additionally, the Statutory Durable Power of Attorney does not terminate automatically when your transaction ends.  Because a Statutory Durable Power of Attorney can grant the Agent a multitude of powers and be valid until revoked, I typically recommend that persons considering using a Statutory Durable Power of Attorney consult and attorney prior to using the document.

The specific Power of Attorney is typically drafted by an attorney, for a fee, and is specific to the transaction being handled by the title company. Because it is drafted specifically for the transaction at hand, there are no other powers that can inadvertently be granted, and a termination date can be included in the document.

Because of the potential for fraud title companies are often wary of Powers of Attorney.  They will allow them, subject to approval of any lender involved; if the document meets the title company’s underwriting guidelines.  Regardless of which type of Power of Attorney is used, the title company will want to ratify the Power of Attorney by speaking to the Principal on the day the documents are being signed to verify that the Power of Attorney was actually signed by them and that Power of Attorney has not been revoked.  If the Principal is incapacitated at the time of the closing of the transaction, the title company may require verification from the Principal’s physician that the Principal was competent at the time the Power of Attorney was signed and verification from a caregiver that the Principal is still alive.

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.

 

 

 

An Affidavit of Heirship is a sworn document that sets out the family history of a deceased person.  The primary purpose of an Affidavit of Heirship is to let others, particularly probate courts, title companies and others interested in the disposition of a person’s estate, know the person or persons who will inherit property under the Texas laws of intestate succession and should include information on whether the decedent had a will.  An Affidavit of Heirship may be used in conjunction with probate proceedings, or may be used as a stand-alone document in the event there is not a reason that the decedent’s estate must go through the probate process.

The Texas Estates Code sets forth a form Affidavit of Heirship that is acceptable for use in conjunction with probate proceedings.  This same form when used as a stand-alone document, however, is not acceptable for title company underwriting purposes because it omits several things that are relevant to the transfer of title and which are typically covered by other probate proceedings.  In addition to the family history, title companies require that any will of the deceased be attached, an affirmative statement that all debts of the decedent, including federal estate taxes and any amounts due under the Medicaid Estate Recovery Program, have been paid.  In order to combat fraud, title companies also require that the Affidavit contain a perjury clause, indicating that the affiant acknowledges that lying on the document will subject them to criminal prosecution.  As an extra defense against fraud, title companies also require that the information in the Affidavit of Heirship be affirmed by two disinterested witnesses that are familiar with the family history of the decedent.

Once an Affidavit of Heirship is completed, the title company examiner will review to determine who will be required to sign the documents transferring title.  Typically this will include not only the heirs at law, but any devisees under the will who are not also heirs at law.  Although the title company will determine who needs to sign, they will not typically determine the interest owned by each heir or devisee as the title company does not provide legal advice to the parties.   The title company will ask that all those required to sign to also sign a document designating how much of the proceeds will be disbursed to each signer, so that an agreement is in place before the title transfer occurs.

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.

 

 

Closing Properties in an Estate

It is not unusual for a title company to handle a transaction in which the last person in the recorded chain of title for a piece of property is deceased.  When this happens, title companies must rely on the Texas Estates Code to determine who has authority to sell the deceased person’s property.  A person who dies with a will is said to have died testate.  When a person dies testate, typically the terms of the will dictate who has authority to act on behalf of their estate and what actions that person(s) can take with regard to property.  When a person dies without a will, they are said to have died intestate.  The Estates Code sets forth procedures for probating the estates of both testate and intestate individuals.

Wills are not required to be probated in Texas, however title companies prefer that they be probated and the statutory requirement followed during the probate process.  It typically takes several months to probate a will in Texas.  An application and the will must be filed with the probate court, the court must approve the application and appoint an Executor (generally the person or persons named in the will if the person dies testate) or an Administrator, notices must be published so that creditors and anyone else interested in the estate can make their claim and an inventory of the assets of the estate must be prepared and approved.

Probates where the Will allows for the sale of property and in which the Probate Court appoints and Independent Executor or Independent Administrator do not require any further action by the Probate Court.  If the Will does not allow for the sale of property, or if the probate is a Dependent Administration, Court approval may be required in order for the property to be sold.  In a Dependent Administration, there is a four step process that the Administrator must follow in order to sell the property which includes filing an Application with the Court to sell the property, Reporting to the Court that the Property is under contract and getting a Decree from the Court affirming that the property can be sold.  This four step process may take in excess of thirty days to complete.

If you have a property that is currently part of an estate, it is a good idea to contact a title company before you list the property for sale so you can understand both the statutory and title company’s requirements.  This will allow you to set reasonable timing expectations for your prospective buyers.

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.

 

 

 

The Texas Homestead and Transferring Title

Texas law protects an individual or family homestead against forced sale to pay debts of general creditors.  A homestead is generally defined as real property owned by the individual or family where the individual or family resides.  A family homestead may be the separate property of one spouse or community property of both spouses, and a family may have only one homestead under Texas law.  Although property may be the separate property of one spouse, either because it was purchased as or with separate property or was agreed to be separate property by both spouses, the status of property as a homestead brings provisions from the Texas Family Code and Texas Estates Code into play.

The Texas Family Code Section 5.001 requires, with limited exception, that both spouses join in the sale, conveyance or encumbrance of homestead property, regardless of whether the property is the separate property of one spouse.  This means that, even if you inherited your bungalow in the Heights or bought it while you were single, the Title Company will require your spouse to execute any Deed to sell the property, or Deed of Trust if you refinance the existing mortgage or take out a Home Equity loan.  Failure of both spouses to sign the Deed or Deed of Trust means the conveyance was not complete and subjects the Title Insurance company to future claims against the title policy(ies) issued.

Likewise, several sections of the Texas Estates Code are applicable to homestead property.  Surviving spouses and minor children of a deceased person have the right to occupy homestead property after the death of the deceased, even if the deceased had a will that bequeathed the property to someone else.  For example, if a property owner remarries late in life and executes a will leaving his home to his children, the status of the property as homestead gives the new spouse the right to occupy the homestead for the remainder of his or her life.  A Deed from the Executor to the children will not extinguish the surviving spouse’s right to occupy the property, and a Title Company will require the surviving spouse to join in any sale, conveyance or encumbrance of the homestead property.

If you are selling or borrowing against your homestead and 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.