This whole situation is absolutely bizarre to me as an Australian. Our states converted to a system of centrally registered title (also known as Torrens title) over a hundred years ago to avoid the “old system” problem of tracing ownership records backwards in time. Although the system is still in effect for some properties, in many cases they’ve been converted anyway.
Working Title (Insurance)
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Re: Working Title (Insurance)
#22A surprising law foundation in the US is that if you live somewhere long enough as if you were the owner, then it becomes yours. Sometimes known as "squatters rights". This feels a bit unfair at first. However, this "if you think you own it, you probably do own it" has turned out fairly well. At least in most places in the US, unlike England, you don't have to trace all property transfers back to Norman Conquest in 1…
As a practical matter I think this mostly confuses adverse tenancy with adverse possession. The latter case, of squatters gaining full legal title to a piece of property, is extraordinarily rare, and as I understand it the cases all tend to be marginal (like: abutments of adjacent rural properties changing hands). Adverse tenancy is somewhat more common: you can establish through your actions an expectation that you'…
> The latter case, of squatters gaining full legal title to a piece of property, is extraordinarily rare, and as I understand it the cases all tend to be marginal (like: abutments of adjacent rural properties changing hands).
The marginal cases are more common certainly, but the full version does happen. There's one that comes up on Reddit every so often of someone living in a home that had been abandoned in the 2008 crisis and presumably just written off by the legal owners (sounded like it had been owned via multiple levels of bankrupt property companies) for long enough that they claimed ownership, apparently successfully.
Re: Working Title (Insurance)
#23My real introduction to Title Insurance came not when I purchased my first house, but as I sold it. The buyer was an experienced builder who was buying the house (in a fairly desirable area of the city where property was appreciating quickly) in order to add upgrades and flip it. When his agent asked why he had crossed out the line for title insurance, he retorted, "that property's been sold three times in 10 years.…
That's an interesting argument. My intuition would've been the opposite: the title is much more likely to be dirty. 3 quick transactions in under a decade (and a fourth ongoing) means that many more opportunities for problems. Each transaction is a new opportunity involving a whole new set of people to be engaged in fraudulent conveyance or have a spouse pop out of the woodwork (as mentioned in OP).
Maybe he figured that the real safety comes from there being so many other people to sue given all the transactions...?
Re: Working Title (Insurance)
#24This whole situation is absolutely bizarre to me as an Australian. Our states converted to a system of centrally registered title (also known as Torrens title) over a hundred years ago to avoid the “old system” problem of tracing ownership records backwards in time. Although the system is still in effect for some properties, in many cases they’ve been converted anyway.
And yet my conveyancer (WA) last year still tried to hock me some expensive additional title insurance. My line to her was “this sounds like it’s protecting me from you not doing your job”. I don’t recall the response but it was unconvincing.
Re: Working Title (Insurance)
#25A surprising law foundation in the US is that if you live somewhere long enough as if you were the owner, then it becomes yours. Sometimes known as "squatters rights". This feels a bit unfair at first. However, this "if you think you own it, you probably do own it" has turned out fairly well. At least in most places in the US, unlike England, you don't have to trace all property transfers back to Norman Conquest in 1…
Yes, but keep in mind that "as if you were the owner" in at least some jurisdictions means that you were maintaining and improving the property and paying the property taxes. And we're talking about many years, not just squatting on a vacant property for a few months.
Re: Working Title (Insurance)
#26Earlier quoted context omitted.
As a practical matter I think this mostly confuses adverse tenancy with adverse possession. The latter case, of squatters gaining full legal title to a piece of property, is extraordinarily rare, and as I understand it the cases all tend to be marginal (like: abutments of adjacent rural properties changing hands). Adverse tenancy is somewhat more common: you can establish through your actions an expectation that you'…
> The latter case, of squatters gaining full legal title to a piece of property, is extraordinarily rare, and as I understand it the cases all tend to be marginal (like: abutments of adjacent rural properties changing hands). The marginal cases are more common certainly, but the full version does happen. There's one that comes up on Reddit every so often of someone living in a home that had been abandoned in the 2008…
The one I see on Reddit is "Texas guy buys $300,000 house for $16" (the registration fee), but he was evicted less than a year later. I'd love to see the case where someone succeeded in holding the house! I did go looking, but it's just yard fence after yard fence in the court cases.
Re: Working Title (Insurance)
#27My real introduction to Title Insurance came not when I purchased my first house, but as I sold it. The buyer was an experienced builder who was buying the house (in a fairly desirable area of the city where property was appreciating quickly) in order to add upgrades and flip it. When his agent asked why he had crossed out the line for title insurance, he retorted, "that property's been sold three times in 10 years.…
That's an interesting argument. My intuition would've been the opposite: the title is much more likely to be dirty. 3 quick transactions in under a decade (and a fourth ongoing) means that many more opportunities for problems. Each transaction is a new opportunity involving a whole new set of people to be engaged in fraudulent conveyance or have a spouse pop out of the woodwork (as mentioned in OP). Maybe he figured…
Patrick's point about off-record transactions feels important here. Each on-record transaction leads to an opportunity for off-record transactions to be discovered! On-record ones are likely clean in some sense, whereas 10 years of no real estate on-record transations means nobody has looked.
But to your point... the more people involved, the more moving parts involved.
Re: Working Title (Insurance)
#28I recall enterprising lawyers researched California coastal property titles back to the 19th century to overcome more recent prohibitions on subdivision -- successfully! Does anyone remember their names or details?
Re: Working Title (Insurance)
#29This whole situation is absolutely bizarre to me as an Australian. Our states converted to a system of centrally registered title (also known as Torrens title) over a hundred years ago to avoid the “old system” problem of tracing ownership records backwards in time. Although the system is still in effect for some properties, in many cases they’ve been converted anyway.
And yet my conveyancer (WA) last year still tried to hock me some expensive additional title insurance. My line to her was “this sounds like it’s protecting me from you not doing your job”. I don’t recall the response but it was unconvincing.
You’d think conveyancing would be cheaper here, but you’re still spending $2-3k on who knows what to transact property. At least the process is quick and final compared to the mess in other common law jurisdictions
Re: Working Title (Insurance)
#30A surprising law foundation in the US is that if you live somewhere long enough as if you were the owner, then it becomes yours. Sometimes known as "squatters rights". This feels a bit unfair at first. However, this "if you think you own it, you probably do own it" has turned out fairly well. At least in most places in the US, unlike England, you don't have to trace all property transfers back to Norman Conquest in 1…
As a practical matter I think this mostly confuses adverse tenancy with adverse possession. The latter case, of squatters gaining full legal title to a piece of property, is extraordinarily rare, and as I understand it the cases all tend to be marginal (like: abutments of adjacent rural properties changing hands). Adverse tenancy is somewhat more common: you can establish through your actions an expectation that you'…
Adverse position cleans up title, because the conditions are basically live in it and fufill the obligations of an owner for X years, and you are the owner.
So if many years later, someone comes out of the woodwork to claim a fradulent conveyance, it doesn't matter. You lived in it and paid taxes as if it was yours for 10 years (or whatever), so either it's yours by conveyance or yours by adverse possession, and it's too late to undo the transfer.