Why title companies need the seller’s Statement of Information

caltitleWhen a title order is opened, the title company will review those records which describe the subject property. These include deeds, deeds of trust, easements, CC&Rs, agreements, and other recorded instruments. However, these only represent a portion of the documents which may affect the title to the land. There are also judgments, tax liens, bankruptcies and other matters which can impact the land, but which do not describe the property.

This latter group of documents is indexed by name and not the property. The recorded instruments may contain certain identifying information such as a portion of the social security number, date of birth and mailing address or business name. If the party named in the document is the owner, the lien will attach to the land even though the property is not identified in the instrument. The only way for the Title Company to verify the existence of such liens is with a “Statement of Information” (Sometimes referred to as a Statement of Facts) completed and signed by the owner. This is mandatory in all transactions, but more so when the seller(s) has a common name. (On some common names there may be over 200 individual liens and judgments to review.

In these days of short sales and foreclosures, we find more and more tax liens, judgments or other similar matters against the seller(s). In order for “Title” and “Escrow” to deal with these, they need to be identified very early on in the transaction. All too often, the Statement of Information needed to clear these matters is not given to the Title Company until a day or two prior to the scheduled closings. In those cases, if a lien is found, it may cause a delay, or cancellation of the sale.

This information is completely from Cam Hunter at California Title Company. Find out more at www.caltitle.com

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