North Dakota is only one of a handful of states in the country where abstracts dominate the real estate landscape. Whether you are buying your first home or purchasing a storefront for a new business, North Dakotans and those that choose to do business in the state have to decide if an abstract of title or title insurance policy is acceptable to their needs. A sense of frustration may set in when trying to determine which product will best meet your need of showing ownership to your new land.
So, what will you receive if an abstract is chosen over a title insurance policy? An abstract summarizes the history of all matters of public record recorded by an elected county recorder affecting a certain parcel of land. The abstractor, who is the licensed professional drafting the abstract of title, searches the public record to a specific date looking for items such as deeds, mortgages, liens and affidavits that affect the condition of the land. Attorneys are then hired to review the abstract and prepare a report called an attorney opinion that highlight matters that affect the land and, in their opinion, who owns the land. Being the attorney opinion is just that—an opinion—it is possible for different attorneys to have different conclusions as to ownership of the land and the matters that affect it.
While an abstract does provide a full history of public matters affecting your land, what it will not do is provide a guarantee or insure your right to ownership. Unforeseen issues affecting your right of ownership can always arise that is not visible in an abstract, such as fraud or undisclosed heirs, which might cause your right of ownership to be challenged months or, even years after the purchase in a court of law. This is just one example where the purchase of a title insurance policy shows its value. A title insurance policy is an indemnity contract issued by a title company to a person or entity it believes should have the right to own a specific parcel of land. It is also common in North Dakota for mortgage companies to require the purchase of a lender’s title insurance policy insuring the priority of the lender’s mortgage lien on property being used as collateral.
Ultimately, the choice to obtain an abstract or a title insurance policy can vary from deal to deal, with some buyers deciding purely on cost or level of risk involved. Regardless of the factors that go into your decision to buy title insurance or not, a buyer should keep in mind that a title insurance policy, subject to its terms and conditions, can help cover the costs for unexpected matters such as a legal defense against claims challenging your ownership, correcting existing title defects affecting the marketability of your property, or in some situations, coverage for a complete loss of the property. Although ownership challenges and title defects do not impact every land owner, thanks in part to the work title companies do each and every day, hidden risks do exist and often occur when least expected--will you be ready?
Joseph A. Camisa, Jr.
The team at Guaranty & Title Co. Commercial Services would like to wish our clients a Happy New Year and best wishes for a prosperous 2020. We extend our deepest appreciation to everyone for making 2019 one to remember.
This past year was a very exciting and busy year for our commercial team. We continued to grow into new markets and territories all while expanding our resume with new and challenging commercial real estate transactions. The team and our additional land assets managed to service 10 total wind farm transactions, 1 solar farm transaction and a multitude of other various energy and state infrastructure needs all while providing the very best local service in every market that we serve. Our commitment to a successful commercial real estate transaction for our local, regional and national clientele was second to none. Our local offices from Williston to Minot, Bismarck to Grand Forks and Fargo (and all those offices in between) along with all of our Minnesota offices put in long hours to ensure that our clients real estate needs were met. They were willing to close a transaction wherever and whenever…oh the stories they could tell.
We have been successful at creating a seamless closing environment from start to finish which includes becoming a centralized department for all commercial real estate requirements and needs. Guaranty & Title Co. Commercial Services continues to be a premier agent for many of the nation’s largest underwriters. Our diverse team of title and escrow professionals bring a wealth of knowledge and experience from local and national markets to every commercial transaction.
In 2020 we celebrate 10 years of the Commercial Services team and we promise to continue our dedication to providing our clients with the very best service, the best real estate technology and the best closing experience throughout North Dakota, Minnesota, Wisconsin and Montana. We would love the opportunity to serve you and your commercial real estate needs.
Andrew S. Engelman, VP Commercial Services