QWe recently read about a possible scam operation, whereby a company advises homeowners that to protect themselves -- and their valuable home -- they have to spend a lot of money to get a certified copy of their deed.
We own our house and obviously want to protect this large investment. How do we determine which companies are legitimate and which are not?AThe simple answer is that you do not need a certified copy of your deed. In fact, once the deed to your house is recorded in your names, you really do not even need the deed at all.
Typically, when a consumer buys a house, he or she goes to a settlement attorney or title company. The settlement officer has the responsibility of collecting and distributing the sales proceeds and making sure the buyer signs the loan papers and the settlement statement, called a HUD-1 form.
The seller provides the settlement company with the names and loan numbers of all existing loans and signs the deed and other related documents to record the deed in the buyer's name.
When settlement has been completed, the deed and the loan papers are sent to the recorder of deeds in the jurisdiction where the property is. These documents are recorded and then sent back to the settlement attorney. The recorded loan documents are then returned to the mortgage lender, and the deed and the title insurance policy are sent to the buyer.
It is a good idea to keep all of your settlement documents, especially the HUD-1 settlement statement. If you go to sell the property and have made more than the $250,000/500,000 exclusion of gain currently allowed under the tax laws, the settlement statement will come in handy to justify various settlement expenses so as to reduce your overall profit.
You should also get a copy of the deed of trust (the mortgage document) and the promissory note you signed at settlement. Hopefully, you will never need these documents, but should the lender send you a letter stating that you are in default on your loan obligations, it is always a good idea to refer back to these documents. They spell out what the lender can and cannot do and the process by which you can be determined to be in default.
The title insurance policy is also a very important document. In the event that someone suddenly raises an issue against or about your property, you may be able to file a claim with the title insurance company that issued the policy. Such a problem, for example, could be an old mortgage that was never released from land records and is discovered when the owner tries to sell the house. There usually are time limitations spelled out in the title policy that require the homeowner to file a claim within a certain number of days after a problem emerges. The policy will also explain what is covered and what issues are not insured.
Another document you should get at settlement is the survey. This is known as a house location survey and will give you a general picture of where your property lines are. If, for example, your neighbor's fence encroaches on your property, the survey should depict this and you should be advised of this issue when you are at the settlement table. The danger here is a concept known as "adverse possession." Many states provide that if someone uses or occupies another person's property for a period of time, and this encroachment is what is called in legal terms "open, notorious and hostile," the person making the incursion will ultimately own the property if he or she seeks court approval.
Or as one judge defined it in militaristic terms, "the person claiming the property by adverse possession must unfurl his flag on the land and keep it flying so that the owner may see, if he wishes, that an enemy has invaded his domain and planted the flag of conquest."
State laws differ, and you should consult an attorney for more details should you be involved in such a situation. In the District and Virginia, the statutory limit is 15 years. In Maryland, 20 years are required before a neighbor can claim title by adverse possession.
But what about the deed to your property? Once it has been recorded, you should never need it again. When you go to sell the property or refinance your current mortgage, the settlement attorney will conduct a title search that should show you own the property. You do not have to present the deed to anyone.
If you are concerned about ownership, here are two suggestions: First, go to the office of the recorder of deeds in the jurisdiction where your property is, and ask to confirm that you own the property. A helpful clerk may even be able to provide you with a copy. In fact, many jurisdictions (such as the District) have Web sites where you can search all transactions going back a number of years.
Alternatively, you can ask your attorney to run a title search just to confirm that you are, in fact, the lawful owner of your property.
Under no circumstances, however, should you waste your money with any company that offers you a certified true copy of your deed. It is absolutely unnecessary.