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Working Title (Insurance)

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Re: Working Title (Insurance)

#31

Post by toomuchtodo »

HeyLaughingBoy wrote: post #9

My 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.…

I do not buy title insurance on investment properties if the last owner had a mortgage. If the title commitment was good enough for the bank, it’s good enough for me. I build the potential clouded or impaired title into my risk model.

(I’ve also filed public comments with the CFPB on title insurance being junk fees [1], full disclosure)

[1] https://news.ycombinator.com/item?id=40524304

Re: Working Title (Insurance)

#32

Post by hakfoo »

I have to wonder why we haven't moved towards the Japanese example in the article, where the government provides a single-source of truth for title ownership.

The low-value, high-margin industry disappears, and presumably there are mechanisms built into the state to resolve problems.

I suspect it comes from a very similar logic to "why aren't wills centrally filed instead of random notaries and dueling documents?"

Re: Working Title (Insurance)

#33

Post by roenxi »

hakfoo wrote: post #32

I have to wonder why we haven't moved towards the Japanese example in the article, where the government provides a single-source of truth for title ownership. The low-value, high-margin industry disappears, and presumably there are mechanisms built into the state to resolve problems. I suspect it comes from a very similar logic to "why aren't wills centrally filed instead of random notaries and dueling documents?"

The US approach is probably better. People have a very strong urge to centralise all power and knowledge in one centralised body but that is bad strategy. (1) Powerful centralised bodies usually end in disaster. If they get strong enough, they revert to groupthink and start breaking things. (2) Governments don't have enough bandwidth to deal with all this stuff. If the government is handling 10 critical services badly, voters can only reliably vote on 1 per election and it is a struggle to work out what the priority is. And (3) the office doesn't force reality to be simple, it just bulldozers over inherent complexity in the real world.

Pushing as much of the process as possible into the courts and private sphere is better strategy than having a blessed database. It gives people more opportunities to sort things out quickly and in parallel with other issues.

Re: Working Title (Insurance)

#35

Post by xboxnolifes »

danielvf wrote: post #2

A 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…

Adverse possession becomes a lot more of an obvious outcome when one stops thinking about urban areas and well put together homes, and instead starts thinking about abandoned areas and properties with unknown owners. At the end of the day, towns want to collect property taxes and would rather have someone improving a property and paying taxes on it than a slowly degrading property that has clearly been forgotten about, considering the owner didn't notice the adverse tenant for decades. Or maybe nobody could manage to contact the owner for decades. Or maybe the named owner for a plot of land was lost to time. What is the other option, leave it untouched for decades and centuries because at some point in the past someone had their name on it?

Re: Working Title (Insurance)

#36

Post by klipt »

xboxnolifes wrote: post #35
danielvf wrote: post #2

A 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…

Adverse possession becomes a lot more of an obvious outcome when one stops thinking about urban areas and well put together homes, and instead starts thinking about abandoned areas and properties with unknown owners. At the end of the day, towns want to collect property taxes and would rather have someone improving a property and paying taxes on it than a slowly degrading property that has clearly been forgotten abou…

This seems like a problem that's automatically solved by land tax. If the property is abandoned, the tax goes unpaid and the state auctions the property off to cover the unpaid tax. Voila, new owner of record.

Re: Working Title (Insurance)

#37

Post by Kalium »

klipt wrote: post #36
xboxnolifes wrote: post #35

Earlier quoted context omitted.

Adverse possession becomes a lot more of an obvious outcome when one stops thinking about urban areas and well put together homes, and instead starts thinking about abandoned areas and properties with unknown owners. At the end of the day, towns want to collect property taxes and would rather have someone improving a property and paying taxes on it than a slowly degrading property that has clearly been forgotten abou…

This seems like a problem that's automatically solved by land tax. If the property is abandoned, the tax goes unpaid and the state auctions the property off to cover the unpaid tax. Voila, new owner of record.

That works to the extent that a polity is willing and able to seize, care for, and sell off parcels. At scale, this is not guaranteed to be as easy as it sounds. Case in point: Detroit.

Re: Working Title (Insurance)

#38

Post by Horffupolde »

danielvf wrote: post #2

A 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…

Utis posidetis is already present in Roman law.

Re: Working Title (Insurance)

#39

Post by robocat »

hakfoo wrote: post #32

I have to wonder why we haven't moved towards the Japanese example in the article, where the government provides a single-source of truth for title ownership. The low-value, high-margin industry disappears, and presumably there are mechanisms built into the state to resolve problems. I suspect it comes from a very similar logic to "why aren't wills centrally filed instead of random notaries and dueling documents?"

> The low-value, high-margin industry disappears

We have a registry in New Zealand: we don't need title insurance (I haven't heard of it but presume it is available). Unfortunately there are still plenty of other silly costs that remain: the lawyer conveyancing is still approx $1000, you must purchase a LIM in your own name if you wish to be able to contest certain failures of your local government, mortgages require property insurance, property insurers require a variety of expensive work (often pointless shit), you can't get the government cover except indirectly via property insurance, ... Fortunately we mostly don't use sellers agents but vendors agents still take 2 or 3 percent and agents require certification so it has aspects like a monopoly with little competitive pressure.

And the registry can be interrogated so privacy is a problem. Mortgage information also shows in credit reports so there's even less privacy with that sensitive information.

Re: Working Title (Insurance)

#40

Post by robocat »

roenxi wrote: post #33
hakfoo wrote: post #32

I have to wonder why we haven't moved towards the Japanese example in the article, where the government provides a single-source of truth for title ownership. The low-value, high-margin industry disappears, and presumably there are mechanisms built into the state to resolve problems. I suspect it comes from a very similar logic to "why aren't wills centrally filed instead of random notaries and dueling documents?"

The US approach is probably better. People have a very strong urge to centralise all power and knowledge in one centralised body but that is bad strategy. (1) Powerful centralised bodies usually end in disaster. If they get strong enough, they revert to groupthink and start breaking things. (2) Governments don't have enough bandwidth to deal with all this stuff. If the government is handling 10 critical services badl…

The proper US answer shouldn't be federal centralisation, but centralsation per state. That should avoid to worst centralisation issues and have clear benefits. And it clearly works in other countries that are smaller or bigger than individual states: it works in New Zealand (similar to Oregon) and Australia (about 30 million people, though I don't know if their registry is federally centralised) for example.
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