“Title” equates to legal ownership of property. It legitimizes your right to “peaceful enjoyment” of the property you own, within restrictions or limitations of use imposed by government authorities. A “clear title” means ownership is without blemish. A “cloud on title” indicates that some inconsistency exists, which may blemish ownership if not corrected. A “defect in title” is indicative of an encumbrance or a more severe problem needing remedy. Finally, a “failure of title” demonstrates failure to convey ownership from one owner to the next.

Legal title passes from one owner to another in one of many ways, such as through a court decree, descent and distribution, etc. It is also referred to as the “transfer of title." In most cases, however, it is conveyed through a written instrument called the DEED. The person conveying ownership is called a “grantor,” while the person to whom ownership is conveyed is called the “grantee.”. The deed must be delivered by the grantor and accepted by the grantee.

Chain of title refers to the chain of ownership created by repeated transfers of title of the same property. Each time a legal title is transferred, the new ownership is recorded in county courts for public records. Over time, a chain of ownership results from such repeated changes of hands.

Title insurance is an insurance policy issued by an insurance underwriter guaranteeing a buyer’s ownership and peaceful enjoyment against claims, liens, or judgments associated with a property after the purchase is completed. Such insurance protects against losses arising from events occurring prior to the date of the policy. Unlike real property or casualty insurance, where coverage starts on the day a policy is issued, title insurance, being indemnity insurance, causes coverage to stop on the day the policy is issued, which coincides with the recording date of the transfer document. Its coverage extends backwards in time and guarantees that events prior to your ownership do not result in future losses to you.

Title insurance provides protection for as long as the current ownership lasts. When the current owner sells and/or transfers title, the same cycle starts all over again. The new owner’s policy ends on the date of issuance, covering them from losses arising during previous ownership.

In general, there are two different types of title insurance policies available. The Owner’s Title Insurance Policy, which offers protection only to the owner against defects in their title to real estate. The lender’s title insurance policy is meant to insure and protect only the lender's loans against defects and losses until the mortgage is paid off. Consequently, a lender’s policy does not provide coverage to the owner in the absence of the owner’s policy. A new owner’s policy need not be necessary when refinancing an existing property; however, the lender will require the purchase of a new lender policy.

Title Insurance Companies provide services to facilitate the performance of escrow, closing, disbursement of funds, and the issuance of title policies. A full-service title company performs the search on the property, conducts the requisite due diligence to review the chain of title, identify any inconsistencies, liens, judgments, etc., issue the commitment to insure, manage the funding through escrow accounting, coordinate all activities between the buyer, seller, realtors, mortgage brokers, lenders, etc., conduct the closing, disburse funds, issue the title insurance policy to both the buyer and lender, and get all required documents recorded to establish clear ownership.

Title insurance costs may be broken down to two basic types: fixed cost and variable cost.

Fixed Costs (the largest component) typically represent the Title Insurance Premium (including any applicable endorsements) paid one time based on the purchase/sale price of the property. Additionally, they also include factors such as document recording fees, stamp fees, intangible taxes, city assessments, etc. These costs are formulated and regulated by the government and remain constant across all title insurance companies.

Variable costs (the smaller component) typically represent service charges, including search and examination fees, processing and settlement fees, mail/wire/document storage handling fees, notary charges, etc. It is in this area that title agencies differentiate themselves. Additionally, they may also include factors such as applicable survey charges, inspection and appraisal charges, insurance charges, loan costs, etc. (all or most of these are usually performed independently and charged by outside service providers).

On some occasions, one party will bear responsibility for the total cost. Generally, most costs are spread between the buyer and seller, although negotiated agreements among them dictate eventually who pays for what. Please fill out and submit our online request for quotation form for detailed costs associated with your specific situation, and our staff will respond to your request within 24 hours.

Cost differentiation is one of the many components consumers use in such determination. The cheapest service, however, is not always the best. In addition, there are many intangible attributes more difficult to measure. They include value additions on account of the length of time a title company has been in business, the expertise and experience of the facilitators, the professionalism and courtesy with which a service is provided, the accuracy of the work performed, the office environment, commitment to management by process control, and the word of mouth that ultimately defines quality. These are realized through personal experience.

At Apple Title, LTD, we believe that quality is defined by customer requirements. The satisfaction of those requirements is the customer’s right and our job. Despite the heavy regulation within our industry, we have further submitted our standards to the test through the Better Business Bureau. We have been in business for over fourteen years, have a stellar record with our accuracy, enjoy enormous repeat business, and provide a beautiful office environment and a staff second to none.

The Florida Constitution provides that any real property, condominium, mobile home, etc. that serves as a permanent residence of a Florida citizen is entitled to homestead benefits and exemptions. In order to benefit from this provision, the owner is required to file and record a “Notice of Homestead” in the official records of the local county circuit court. Homestead property is protected from (1) forced sale by creditors and entitled to (2) property tax exemptions permitted under the law.

Internal Revenue Tax Code Section 1031 allows taxpayers to defer income tax on capital gain realized (typically on the difference between the property’s adjusted basis and the sale price) from the sale of investment property (“relinquished property”) that is held by the taxpayer for investment or productive use in a trade or business by reinvesting the proceeds in another property of like kind (“replacement property”). A 1031 exchange is possible only when you sell real estate held for investment purposes. It cannot be used for the sale of your personal residence. Consult IRS rules for the definition of like kind and what types of properties qualify as like kind.

In order to preserve the exchange element and prevent taxpayers from merely selling relinquished property and buying replacement property, a taxpayer’s access to the sales proceeds is restricted during the exchange period by requiring a third party (qualified intermediary, trustee, or escrow agent) to hold the proceeds and disburse the same for the replacement property. At closing, proceeds are transferred to the third party acting as a facilitator to hold the funds until they are used to acquire the new property. The seller is allowed up to 45 days from such sale to identify the like-kind property, where sales proceeds are to be applied.

Apple Title, LTD would be able to assist your qualified intermediary in acting as escrow/closing agent in both the sale and purchase of your approved 1031 Exchange properties.

FIRPTA stands for Foreign Investors in Real Property Taxation Act of 1980, which is part of the Internal Revenue Tax Code. The Act was enacted with the intent of recovering at least a portion of the taxes (based on the sale price and not the proceeds to the seller) due on the sale of real property by a foreign seller. A foreign seller may be a non-resident alien individual, corporation, partnership, trust, or estate.

To ensure tax collection from foreign taxpayers, FIRPTA requires buyers of U.S. real property interests to withhold 10% of the sales price. The seller may apply to the Internal Revenue Service (IRS) prior to closing to reduce this 10% to the amount of tax estimated to be due determined by the IRS certification.

FIRPTA applies in virtually all cases where a foreign owner of a U.S. real property interest disposes of that interest. Provisions of the law that would prevent recognition of gain generally do not apply unless the seller receives a U.S. real property interest in a qualifying non-recognition exchange.