What is a Power of Attorney?
A Power of Attorney (hereinafter “POA”) gives another person the authority to make personal and financial decisions on the principal’s behalf. A POA can cover all aspects of the principal’s personal and financial affairs, or may be limited to specific situations and activities. In short, in a POA the principal (think seller or buyer) gives the attorney-in-fact (now referred to as the “agent” as in “agent acting for the principal”) the right to close the real estate deal on the principal’s behalf and with the principal’s full consent.
Taxation of real property in Texas is controlled by provisions found in the Texas Constitution and the Texas Tax Code. Because taxes are based on the assessed value of the property, property taxes are commonly referred to as “ad valorem” taxes.
The need for a guardianship in a real estate transaction can arise in several ways. If someone in title is a minor child (likely through inheritance) a type of guardianship is needed. We may also need a guardianship if there is a mental competency issue with a seller.
A guardianship is a court proceeding to protect the interest of someone who is not legally or mentally capable of conducting his/her own affairs. This is the process where a guardian is appointed for another person to handle the ward’s personal or business affairs.
What is FIRPTA?
The Foreign Investment in Real Property Tax Act (FIRPTA), enacted in 1980, requires foreign persons to pay U.S. income tax on the gains they make from selling U.S. real estate. FIRPTA applies to the sale of interests held by nonresident aliens and foreign corporations in real property within the United States. FIRPTA imposes a duty on the buyer in the transaction (not the title company) to deduct and withhold a portion of the sales price to send and report to the Internal Revenue Service.
An endorsement is something that changes the terms of the coverage in the title policy. It is an attachment to the policy that generally offers more coverage from what is included in the policy. Each endorsement has its own Procedural Rule and Rate Rule to follow to be able to issue the endorsement.
To determine which endorsements are applicable, the property type has to be reviewed and determined to be residential or non-residential property. This can get a little confusing because a legal definition is applied – not necessary current use or zoning.
The Texas Real Estate Commission adopted changes to the mandatory contract forms in February. The updated forms are available for use now and become mandatory for use May 15, 2018. Below is a description of the changes to the forms and the changes apply to all forms unless noted otherwise. The paragraphs referenced below will track the numbers in the One to Four Family Residential Contract (Resale) and may adjust in the other contract forms.
TITLE COMMITMENTS: WHAT ARE THEY?
A commitment for title insurance (“Title Commitment”) provides a buyer and lender with terms and conditions for how the final title policy will be issued. Title insurance offers protection for buyers and lenders from certain defects or errors in the title to a property. There are four main parts (called “Schedules”) of the title commitment.
Area and Boundary Coverage (a/k/a Survey Deletion). What is it?
When putting an offer together, realtors have the option of checking a box in the contract that could end up being very important to a buyer down the line. Paragraph 6(A)(d) gives the following options:
If you’ve ever received a title commitment back from your title company showing a requirement related to a divorce for your client you’ve likely wondered why there are additional requirements being made on your Schedule C. In order for a title company to rely on a client’s divorce decree, the decree itself must contain some very important language. If the decree is incomplete, a warranty deed from the ex-spouse can be required which often results in an unhappy experience for your clients. The article below discusses a few scenarios that can create delays in getting to closing.
When there has been a death in the chain of title, the transaction can be very complex. If not handled properly a realtor could find themselves with some serious issues. A realtor’s best bet is to have a general working knowledge of the issues and then partner with a title company that can handle the transactions properly.