Saturday, February 14, 2009

Gap in Title Insurance

There are a number of circumstances that create a "gap" between the examination of title and Date of Policy coverage. The following are examples of a "gap":

- The recorder's office may delay in recording instruments after they are filed or presented to the recorder. The courthouse examination at time of filing does not include those previously filed instruments not yet recorded. (In many states an instrument is record notice from filing or presentation to the recorder; in some states the instrument is not record notice until later recorded by the recorder). This is "gap."

- The title company's plant may be currently posted several business days prior to date of examination. This is a "gap."

- The title company may close and file for record without down dating, extending or continuing its prior search of the records. This is a "gap."

- The title company may close the real estate transaction and disburse, but fail to file the instruments for several days or weeks. This is a "gap."

- The title company may secure execution of the documents on a loan subject to right of rescission, but may not continue the examination when the mortgage is filed for record after the three day right of rescission expires. This is a "gap."

- In each case, there will be a difference in time between the date through which the last examination of title is made and the date of record notice (by filing or recording) of the insured's deed or mortgage. This is a "gap."

The gap between the date of filing or recording of instruments and the date through which a current examination will be made varies widely. In some locations, the examination customarily is done through time or recording, with no gap in the time between the examination and Date of Policy, or is done to within a few hours of the current filing. Most common is a gap of anywhere from a few days to about two or three weeks, if the title is down dated or continued until time of closing or filing. In a few counties sprinkled throughout the U.S., the gap ranges from two to eight months. For example, in the area around Atlanta the gap can be up to four months. In Minnesota, the switch to imaging has been followed by an increase in the gap to up to four months.

1 comment:

  1. Actually in many states, the price of title insurance is regulated by a state Insurance Commissioner. In these states, such as Florida, the rate for the insurance premium cannot be controlled by the industry


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