Blog, Business, Real Estate
Update: Indiana’s New Witness Requirement on Recorded Documents
Change of an ‘Or’ to ‘And’ Cause Challenges The recent rewording of a law has caused quite a stir in the business and real estate communities. That’s because changes to Indiana Code 32-21-2-3(a), effective July 1, 2020, now require witness signatures on recorded documents. Senate Enrolled Act 340, passed by the Indiana Senate, merely changed an “or” to an “and” but by so doing, it changed this well-established law to require a common law “proof” of a disinterested party to the transaction serving as a witness to the execution of an instrument. This requirement caught many off guard, necessitating re-documenting transactions or hurriedly changing forms. The perceived requirement of having the witness swear that he or she is not a party to the real estate transaction (deed, mortgage, lease, etc.) disclosed by the instrument and does not “benefit” from the transaction adds a layer of complexity to closings. An additional person must now participate in the closing process and swear to an oath. Many financial institutions are reluctant to have their employees give an oath, which rules them out as witnesses. Furthermore, it’s unclear how “benefit” is to be defined in this scenario. Could a year-end bonus based on loan production technically constitute receiving a benefit from this one transaction? While certain financial institutions may not permit their employees to witness signatures, title companies appear to be fine with their employees acting in this role. Rumors have swirled that many of Indiana’s 92 county recorders are ignoring the statute and accepting documents without witness signatures, provided…
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Banking and Commercial Transactions, Blog, News, Real Estate
Notarize & Prove Recorded Documents in Indiana Effective July 1, 2020
Effective July 1, 2020 A recent change to Indiana Code section 32-21-2-3(a), which takes effect on Wednesday, July 1, requires all written instruments (such as deeds, mortgages, powers of attorney, affidavits, and any other documents that must be recorded in an Indiana county recorder’s office) to be both notarized and proved. Without going into the nitty gritty details (you can find those on the “directive” from the Indiana State Bar Association ), every recorded instrument must now include a witness statement to prove that the person whose signature is notarized signed and delivered the instrument in the witness’s presence (and the witness’s signature must also be notarized).
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Blog, Real Estate
Title Commitments A-Z
So you’re buying your first apartment building or commercial property and you receive a copy of title commitment. Now what? A title commitment shows the current state of title as identified by the title examiner. It consists of three parts: Schedule A: This part of the commitment represents the basic facts of the transaction, including the effective date, the proposed insureds (purchaser and lender), the types and liability amounts of the policies to be issued, the estate being insured, how the title to the state is currently vested, and the legal description and address of the subject property. Schedule B-1: This section lists the requirements that must be met before a title policy will be issued, including any or all of the following items: releases of mortgages, releases of tax liens, entity or estate documentation, releases of judgments, correction deeds, and warranty deeds. Schedule B-2: This section lists the title insurance exceptions. The items not being insured by the title company will initially include standard exceptions, taxes not yet due and payable, and further burdens such as covenants, conditions, and restrictions, easements, and/or mineral reservations Obtain complete copies of each exception document identified in Schedule B-2. An experienced real estate attorney will perform a thorough analysis of the Title Commitment. With respect to Schedule A, the attorney will ensure the Owner’s name and Lender’s name are spelled correctly and the policy is the correct amount (which may vary depending on cross-collateralization). With respect to Schedule B-1, the attorney—if representing the owner—will ensure that all documents requested…
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