FAQ

Banks and other conventional lenders require a lender’s policy in connection with a deed of trust or mortgage secured by real property. Typically, an owner’s policy is issued at the same time and it protects the owner’s financial investment in the real property. A title search may uncover title defects with a property, but title insurance will provide coverage for insured risks and title defects discovered after a transaction is closed.

A title insurance policy is issued after a title search and certification by a licensed attorney (in an “attorney state”) or a title agent (in a “title state”), and underwriting by title insurance underwriters. Even the most diligent title searcher cannot guarantee that there are no title issues and certain risks, such as those listed below, may not be detectable at all:

• Errors in public record

• Unknown or unsatisfied liens

• Forged deeds or other instruments

• Missing or unknown heirs

• Unrecorded easements, use restrictions or other issues

Experience, dependability, drive and a team that is passionate about delivering the service and performance. Standard Title can put its substantial practical legal and underwriting experience across the spectrum of real estate asset classes and transactions to work for you. We truly believe in partnering with our clients and our mission is to deliver superior customer service.

In some states, the seller of real property pays for and provides the owner’s policy, which is evidence to the buyer that there is a marketable title to the subject property. The borrower or purchaser typically pays for the lender’s policy. However, these costs can be negotiated prior to closing a transaction.

If a claim is made against your property, title insurance will, in accordance with the terms of your policy, assure you of a legal defense and pay all court costs and related fees. Also, if the claim proves valid, you will be reimbursed for your actual loss up to the face amount of the policy.

Section 1031 of the Internal Revenue Code provides that no gain or loss is recognized on the exchange of real property held for investment or used in a trade or business. A tax-deferred, or 1031, exchange is a method by which a property owner can trade one or more relinquished properties for one or more replacement properties of "like-kind," allowing the owner to defer the payment of federal capital gains taxes and some state taxes on the transaction.

A qualified intermediary generally is required to complete a 1031 exchange. The use of a qualified intermediary, as an independent, third party to facilitate a 1031 exchange, is a safe harbor established by U.S. Treasury Regulations. When a seller engages a qualified intermediary pursuant to an exchange agreement, the IRS does not consider the seller to have received the sale proceeds – these proceeds are sent directly to the qualified intermediary and the qualified intermediary holds them until they are needed to acquire the replacement property. The qualified intermediary delivers the proceeds directly to the closing entity that deeds the replacement property directly to the seller.

An exchange under Section 1031 is tax-deferred, not tax-free. When the replacement property is ultimately sold, assuming it is not sold as part of another 1031 exchange, the original deferred gain, plus any additional gain realized since the purchase of the replacement property, is subject to tax.

Standard Title’s sister company, Standard Title Exchange Company, can serve as a qualified intermediary to help you complete the documentation necessary to create your 1031 exchange before you close the sale of the property.