DAVID A. MEGAY
I have been an attorney for over 29 years. I have been a member of this firm since 1991 and I have been a principal of same since 1995. I have represented clients that have purchased residential and commercial properties of all shapes, sizes and values. I have also represented business planning clients, from those who are just starting their small business to those who have been large commercial and industrial businesses for generations. I was born and raised in the Tri-County area. My experience in the business community provides my clients with the tools necessary to succeed in their endeavors. I know how to get things done, and my clients benefit from that skill and from my experience and influence in the community. I look forward to being a valuable member of your business team.
Click the Facebook link and “Like” us on Facebook for current OWM news and information.
The material in this publication was created as of the date set forth above and is based on laws, court decisions, administrative rulings and congressional materials that existed at that time, and should not be construed as legal advice or legal opinions on specific facts. The information in this publication is not intended to create, and the transmission and receipt of it does not constitute, a lawyer-client relationship.
Title Insurance - What Is It and Do I Need It?
The law offices of O’Donnell, Weiss & Mattei, P.C., and many of our attorneys, have been title insurance agents for Fidelity National Title Insurance Company for quite a few years. We have recently received a Certificate confirming that our office is in compliance with the Title Insurance and Settlement Best Practices as dictated by the American Land Title Association. We work closely with our clients, and our referral partners (i.e. realtors and mortgage lenders), in handling residential and commercial real estate closings and providing title insurance for same.
During the course of handling the above residential and commercial real estate transactions, we are often asked: What is title insurance and do I need it? A title insurance policy insures the buyer that when he/she/it walks away from the settlement table they are the only owner of the property and all claims to ownership by other parties have been extinguished. In addition, the title insurance policy insures that the property is owned free and clear of any and all liens, judgments, mortgages, encumbrances, etc., except for the mortgage securing the loan that the buyer obtained in order to purchase the property. Unlike automobile insurance, medical insurance, life insurance, etc., the premium paid for the title insurance policy is paid only once, at the settlement table. In addition, the title insurance premium is based upon the amount of insurance purchased. For example, the premium for $100,000 worth of title insurance is $900; for $250,000 is $1,650; and for a $500,000 property is $2,900. There is no requirement, legal or otherwise, that a buyer of real estate purchase title insurance. However, we respectfully suggest that it would be foolish for someone purchasing real estate to not protect their investment by buying title insurance, with few exceptions (i.e., when a spouse purchases his/her spouse’s interest in a marital residence in the context of a divorce, someone buys the family farm from their grandparents, etc.).
If the real estate purchase is being financed by a loan from a conventional lender (i.e., bank, mortgage company, etc.), that lender will almost always require title insurance as a condition of the borrower/buyer getting the loan. The lender will require that the borrower/buyer purchase title insurance in at least the amount of the loan. This provides the lender with insurance that they are issuing a loan, secured by a mortgage, that is signed by the only owners of the property, the loan is secured by a mortgage that is properly recorded by the title company, and the loan is in first position against the property (i.e., recorded ahead of any other liens, judgments, mortgages, etc.). Technically, the borrower/buyer can just purchase title insurance on the loan amount, as opposed to up to the purchase price amount, but that rarely happens as Pennsylvania is a “simultaneous issue” jurisdiction in that the borrower/buyer buys title insurance on the purchase price amount and the title insurance agency thereby issues the title insurance policy on that higher amount while, at the same time, providing the lender with a title insurance policy on the lesser loan amount.
The title insurance company not only provides title insurance, but handles all procedures necessary to get the buyer and seller ready for closing, conducts the actual settlement, etc. The title insurance agency orders certifications from property tax authorities, sewer and water authorities, homeowner’s associations (if applicable), etc. . . . all in an effort to make sure that the buyer walks away from the settlement table not only owning the property but also extinguishing all other owners and liens, judgments, mortgages, etc. recorded against the subject property. The title insurance agency will search the property and disclose to the buyer any and all recordings against the property including, but not limited to, easements for driveways, sewer/septic lines, shared wells, etc.
The above summarizes what title insurance is and not only why mortgage lenders require same but also why you should purchase coverage even in a cash transaction. Please contact us if you are contemplating purchasing real estate, refinancing the mortgage on your present home/commercial property, etc. We look forward to working with you and handling your settlement.
If you would care to discuss the above in detail, please call me at 610-917-9347 or email me at email@example.com. Also, please watch OWM's March 2016 Legal Talk program regarding Title Insurance and Sale of Real Estate Issues on our website here.
David A. Megay, Esq., speaking at Chester County Night School Seminars at Owen J. Roberts High School, Pottstown, PA, on 4/13/16 entitled "Buying and Selling Real Estate in PA" and on 4/27/16 entitled "Starting and Operating Your Own Business" (contact Chester County Night School at 610-692-1964 or online at www.chestercountynightschool.org).
Kathleen M. Martin, Esq., speaking at Chester County Night School Seminars at Owen J. Roberts Middle School, Pottstown, PA, on 3/29/16 entitled "Unique Needs of Aging Adults: An Elder Law Perspective"; and at Owen J. Roberts Middle School, Pottstown, PA, on 4/12/16 entitled "Beyond the Simple Will" (contact Chester County Night School at 610-692-1964 or online at www.chestercountynightschool.org).
Kathleen M. Martin, Esq., and Rebecca A. Hobbs, Esq., hosting a table at the Healthy Lifestyles Expo at Sunnybrook Ballroom, Pottstown, PA, on 5/19/16 from 9:30 am to 1:30 pm, which is co-sponsored by Rep. Tom Quigley and TriCounty Community Network (see www.tcnetwork.org for more info).
Watch Legal Talk, brought to you by OWM, on PCTV, Tuesdays at 8:30 on Channel 28, and Thursdays at 9:30 p.m. on Channel 98, or on our website here.
Read Legal Ease every first and third Sunday in the Pottstown Mercury.