Marketable Title Mayhem, October 2020

Welcome to the 11th edition of MTM. Your comments and feedback are always welcome!

We hope you find this month’s quiz challenging and informative. If you enjoy this quiz but are not currently submitting your answers – please consider doing so starting this month.  We only tabulate the results and do NOT judge the results.

A major reason to submit answers is that it gives us a sense of how many people are participating. Right now, while Liz and Andy enjoy assembling the quiz, the number of players is not justifying the time and expense. By responding and submitting your answers, you give us a sense of the value (or not) of the quiz.  So, if you find value/fun in the quiz, we need you to let us know by submitting your answers, please.

This quiz is closed, to view October’s winners view our Honor Roll.

1. You represent a buyer and are preparing a Commitment for an Expanded OP. The last deed of record is a properly executed statutory Enhanced Life Estate Deed wherein Mother conveyed to Daughter and Son. Mother is still alive. Who should be shown as the title owner in Section 4 of the Commitment, Schedule A, e.g. “Title to the estate or interest in land is at the Commitment Date vested in: ___”?
   1. Mother, Daughter and Son
   2. Mother [Only the mother has a present interest]
   3. Daughter and Son
   4. Trick question – the Schedule A of a Commitment does not have a Section 4.
2. You represent borrowers in a refinance. They execute a valid “Power of Attorney for Real Estate Transactions Only” in the amount of $250,000.00.  At closing, the loan amount is bumped to $252,000.00.  The post-closing update report, perhaps provided by the rock stars on the VATC Update team, informs you that:
   1. The update is complete. No issues were found. Any final Policy may now be issued.
   2. The POA, and therefore the refi Mortgage, may be invalid because the mortgage amount exceeded the amount authorized under the POA. Corrective action is required ASAP.
   3. The mortgage amount exceeded the authority under the POA but no corrective action is necessary because nobody except you, or the rock stars on the VATC Update team, would likely spot this issue. Also, even if they did, it would never result in a title insurance claim. 
   4. The mortgage amount exceeded amount authorized under the POA.  However, because Vermont’s POA statute does not require the inclusion of an authorized loan amount in a POA, there is no defect. No corrective action is required.
3. You represent the buyer of residential property. The draft deed to your client includes the following easement, recited in all deeds in the chain of title, to wit: “Included herewith is an easement, in common with others, 50’ wide, running along the lands retained by the Grantor for ingress and egress.” Which of the following statements, if any, is the most accurate for inclusion as a Schedule B, Exception for any final policy:
   1. No Exception because the easement benefits, but does not burden, the Insured property.
   2. No Exception based on the Clearwater case and its progeny. 
   3. Exception: Rights of others, if any, in an easement for ingress and egress described in the Property Description [Note: Since the easement both benefits and burdens the property, it belongs in Schedule B, Exceptions – as well as in the Property Description. “d” below is arguably overbroad and removes the easement as an insured interest. ]
   4. Exception: Easement for ingress and egress as described in the Property Description.
4. IRS Publication 785 provides guidance on what topic?
   1. Attachment of IRS liens against property owned by husband wife
   2. Attachment of IRS liens related to businesses
   3. “Springing” effect of IRS liens and priority over purchase money mortgages 
   4. Priority of purchase money mortgages over IRS liens
5. Seller executed a Power of Attorney in Barton, Vermont. The POA is titled “Real Estate Transaction Only” and provides that it is “valid for 90 days”.  The POA: (a) generally authorizes the sale of real property; (b) is signed by the Principal; (c) is signed by Wendy Witness; (d) is acknowledged before Nancy Notary. The Agent accepted their appointment. Can the POA be utilized on the 89th day? Hint: Think carefully and then, think again.
   1. Yes  [Note: This is true because although this doesn’t qualify for the “Real Estate” POA, it does meet the requirements for a general POA and can be used as such.] 
   2. No because the Agent should not have accepted the appointment
   3. No because it failed to recite the property with specificity
   4. No because the Witness and Agent needed to be the same person