ATG Casenotes and Underwriters' Bulletin
March 2009 Vol. 2, No. 3
 

Claims Corner

Title Indemnity Agreements

Title Indemnity Deposit Agreements

To prevent confusion after a closing, please fill out ATG Form 3011-A: Personal Undertaking with Title Indemnity Deposit Agreement - Member (TI) correctly and completely. This is important both for TIs processed through ATG's Escrow Department and for TIs that members handle in their office. An incomplete TI that is provided to the Escrow Department could lead to errors in the handling of the TI. Providing clear information on a TI is essential because there is always the possibility that the issue that gave rise to the TI may result in litigation.

The TIs should be filled out as completely as possible. If you need assistance with what language to insert into the TI agreement, please contact the ATG Underwriting Department, legal@atgf.com, 217.403.0020, or 312.752.1990. The following are samples of language that may be used for two title issues that are commonly addressed during closings:

Real Estate Taxes:
The _____ installment of the 200_ Real Estate Taxes for PIN ___________ in __________ County. ATG will pay said taxes directly to the County.

Repair Escrows:
Prior to disbursement of funds, ATG must be furnished with the following: (1) Written authorization from the Lender; (2) General Contractor/Owner Sworn Statement and lien waivers, satisfactory to ATG, from all parties supplying materials, labor, or services to the insured premises; and (3) Final inspection, if required by the Lender.

It is also important to insert a date by which the exception(s) must be removed. For real estate taxes, the date entered should be 30 days after the date the taxes are due. Repair escrows should only be used for repairs that are required by the lender. The TI should not have a date entered as the date by which to discharge, eliminate or satisfy all exceptions that is more then four to six months from the TI was executed. The lender instructions will often provide a date by which work must be completed. Any substantial work or remodeling should be set up as a Construction Escrow. Please contact ATG's Escrow Department, 312.752.1986, for guidance, prior to closing the transaction.

The contact information for the party that any refund of the TI deposit is going to go to must also be provided.

No alterations to the preprinted language of the TI agreement should be made unless the change has been approved by an ATG staff attorney. A small change to the preprinted language could have significant unintended consequences.

© ATG|Casenotes/Bulletin 0903_v2n3

[Last update: 3-18-09]

 

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