QUIET TITLE: A USEFUL TOOL IN RESOLVING PROPERTY TITLE ISSUES

Posted June 26, 2023 by Law Office of Andrew Szocka

QUIET TITLE: A USEFUL TOOL IN RESOLVING PROPERTY TITLE ISSUES

The act of Quieting Title on property is intended to produce clear and marketable title. If a property’s title is not clear and marketable it likely has a title defect, also known as a “cloud.” Title defects are called clouds because the defect may obscure the property’s true owner or reflect that a party has an interest in property when it actually does not.

Clouds on title include deeds that break an otherwise clear chain of conveyances or an unreleased mortgage that secures a loan that was actually paid off.

Clouds on title are often discovered when property is being sold. Sellers almost always have a contractual obligation to transfer clear title to the buyer. As a result, the seller obtains a title insurance company to search the property’s title history. If a cloud on title appears, it may need to be resolved with an action to Quiet Title.

The seller, often through an attorney, files a Complaint to Quiet Title in the Illinois Judicial Circuit where the property is located. The Complaint explains the cloud on title and why it should be removed. The court then determines whether or not the cloud is a legitimate claim on the property. If the cloud is not legitimate, the court issues an order removing the cloud from the property’s title history.

For example, you attempt to refinance the current loan that you used to buy your property. The new loan will be secured by a new mortgage. But before your lender provides the new loan, it uses a title insurance company to check your property’s title. Although unlikely, it is possible that the lender’s title insurance company finds an old mortgage recorded against your property that was given by a previous owner.

A Complaint to Quiet Title would allege that the loan secured by the old mortgage was actually paid off. As a result, the holder of the old mortgage should have released it from your property’s record. The old mortgage is still of record by mistake.

In this case, the court hearing your Quiet Title action is highly likely to order the old mortgage released from your property’s title history.

Having a good attorney can help further understand how to Quiet Title and whether it is necessary to resolve any clouds on your property’s title.

Planning on buying or selling property? Local attorney Andrew Szocka provides thorough and speedy real estate and estate planning help in the Chicagoland area. To schedule a free initial consultation, visit the Law Office of Andrew Szocka, P.C. online or call the office at (815) 455-8430.

REFORMATION: FIXING A MISTAKE ON A MORTGAGE.

Posted June 16, 2023 by Law Office of Andrew Szocka

REFORMATION: FIXING A MISTAKE ON A MORTGAGE.

Most adults at some point have received a loan from a bank and given that bank a mortgage in return. The mortgage acts as security to ensure you will pay back the loan. Mortgages encumber specific property – typically the same property that you used the loan to purchase.

A mortgage defines the property it encumbers in three ways, 1) common address, 2) permanent index number, or “PIN”, and 3) legal description.

The common address is what you and the post office use to identify your house, for example, 123 Main Street, Crystal Lake, Illinois 60014. In addition, every property is assigned a PIN. Your county’s tax assessor uses the PIN to identify your property and the amount you owe in real estate taxes each year. Different counties use alternate formats for PINs, but all involve a string of numbers designed to specifically identify your property, for example, “12-34-567-8910.”

Finally, every parcel of property in Illinois has its own legal description. A legal description often takes the following format:

LOT [X], BLOCK [Y] OF [SUBDIVISION], BEING THE [WEST ½] OF THE [NORTHEAST ¼] OF SECTION [Z], TOWNSHIP [XX] NORTH, RANGE [YY] EAST OF THE THIRD PRINCIPAL MERIDIAN, ACCORDING TO THE PLAT THEREOF RECORDED [DATE] AS DOCUMENT [NUMBER], IN THE OFFICE OF THE RECORDER OF DEEDS OF MCHENRY COUNTY, ILLINOIS.

Occasionally, banks make a mistake when putting a legal description on a mortgage. The Lot or Block number could be wrong, the name of the subdivision could be misspelled, or the legal description for a completely different property could be accidentally placed on the mortgage.

Banks solve problems or typos in the legal description through Reformation. By asking an Illinois Court to Reform the mortgage, the Court may correct it so that it a valid and enforceable lien. Court’s base their decision to Reform the mortgage on whether it appears the mortgage, with its incorrect legal description, does not reflect the intent of the parties to the mortgage. In other words, the parties to the mortgage made a mutual mistake in placing the wrong legal description on the mortgage.

Evidence that the parties made mutual mistake can include that the common address and PIN on your mortgage correctly describe your property. In that situation, it is likely that the parties intended to put the right legal description on the mortgage.

Having a good attorney can help understanding how Reformation may affect your mortgage. It can clear up confusion you may have as a property owner so you do not have to face a lawsuit down the road.

What is Title Insurance and do I need it?

Posted June 8, 2023 by Law Office of Andrew Szocka

What is Title Insurance?

Title insurance protects home buyers and mortgage lenders against defects in title. Title is a document which shows legal ownership of a property. Title will show past ownership, past transfers, any liens or encumbrances on title. In a real estate transaction, a title search will more than likely be performed on the property. In most cases, before the real estate property can be transferred, the search must show a good clean title, free of defects which could affect ownership. Two types of title insurance are a lender’s policy which protects the lender’s interest in the property as well as an owner’s policy which protects the homeowner’s interest in the property for as long as they have ownership.

Do I need Title Insurance?

Even if at the time the title search of the property was performed there appeared to be no defects, this does not mean the property is free and clear. There could be many issues which may not have been found which could date back to many years before you received ownership. In example, a long lost heir could claim ownership. There could be issues raised regarding forgery on an old transaction that your seller may not have even been a part of. There could even be old liens, ordinance violations or unpaid taxes which encumber the property. For most people, a home is one of their biggest assets. Title insurance protects your home and your interests. Title insurance is a one-time premium and not a monthly payment you make as with other insurances. Also, title insurance is good for the duration you own your home. This offers you protection from a claim which may have arose years prior to you owning the property. Having to bear the burden of legal fees could costs thousands of dollars. Having a one-time premium for title insurance can save you peace of mind.

Title Insurance Costs?

Title insurance ranges by states. There are many factors which go into deciding how much title insurance will actually costs. One of the biggest factors is how much the house costs, as larger loan could mean a larger loan payout. As with any type of insurance, title insurance costs more depending on the cost of the property. Usually Seller’s attorney chooses the title company, however, you do have the right to shop around. Title insurance is a one-time payment which could save you thousands of dollars and protect your interests.

Are planning on buying or selling property? Local attorney Andrew Szocka, Esq. provides thorough and speedy real estate and estate planning help in the Chicagoland area. To schedule a free initial consultation, visit the Law Office of Andrew Szocka, P.C. online or call the office at (815) 455-8430.

Real Estate Transactions and Powers of Attorney for Property

Posted May 9, 2023 by Law Office of Andrew Szocka

Real Estate Transactions and Powers of Attorney for Property

Buying or selling your home can be stressful. Sometimes, attending the closing can feel more of an inconvenience than a need. Luckily, there are legal documents available to you so that you do not need to be present at the closing on the property. This can provide you with more time to pack, move, or even attend other needed activities. This legal document is known a Power of Attorney for Property.

A Power of Attorney for Property allows someone to step into your shoes to sign documents. The person granting the authority is known as the principal, while the person stepping into your shoes for you is known as the attorney in fact. A Power of Attorney for Property can be as general or limited as needed. It is recommended in the case of a real estate closing; this document be limited. This means, that your power of attorney would only be allowed to sign documents on behalf of you which are limited to the real estate transaction. Many times, it has a clear end date in which upon a successful closing the power of attorney ceases.

When you buy or sell a home you should look for an attorney who is familiar with creating Powers of Attorney for Property as well as being well versed in real estate law. Contact the Law Office of Andrew Szocka, P.C. for any assistance.

Types of Deeds for Real Estate Property

Posted April 26, 2023 by Law Office of Andrew Szocka

Types of Deeds for Real Estate Property

When you are getting ready to buy or sell your real estate, you may hear discussions about the deed to the property. Many people are surprised to find there is more than one type of deed. It is important to have an attorney to make sure you are getting a clean and correct deed.

In real estate transactions there are three main types of deeds which you may encounter. A general warranty deed, a special warranty deed, and a quitclaim deed. Each are independent of each other and each promise different warranties to the buyer.

Quit Claim Deed

A quit claim deed offers the least amount of protection for home buyers. A quitclaim deed does not provide a warranty of title. It does not even guarantee that the person transferring you the land, actually owns the land. You may think, why would one even use a quit claim deed to begin with? A quitclaim deed is easy when there is no uncertainty about ownership.

Warranty Deed

A warranty deed is the most common deed in a real estate transaction. A warranty deed warrants more than a quit claim deed. In example, a warranty deed warrants the grantor has a valid interest in the property, the property is free of any incumbrances and the grantor promises they will defend title to the property against anyone who makes an unlawful claim. A warranty deed is a good option for buying a home because it allows protection on the property.

Special Warranty Deed

Another common deed is the special warranty deed. A special warranty deed however, only protect against any claims that arose when the Seller had the property. It may not protect against any claims or liens from the previous owner before the grantor. A special warranty deed is often done for homes with new construction or homes bought at a foreclosure sale.

Contact the Law Office of Andrew Szocka, P.C. if you have any questions.

Category: Residential Transactions