California Real Estate Practices

Only licensed underwritten title companies and licensed title insurance companies can issue title insurance. There is no state requirement for the involvement of an attorney, abstractor or other special professional. “Professionals” may be retained to provide information to underwritten title companies or title insurance companies but cannot issue title insurance.

Title and escrow companies are permitted to prepare “form” documents but otherwise legal documents must be prepared by an attorney.

Cancellation fees are permitted, but seldom collected absent unusual circumstances, such as a great deal of work having been provided.

Title insurance companies can issue a Release of Obligation pursuant to statutory requirements of Civil Code Section 2941 and can issue a reconveyance of a deed of trust (as a trustee or substituted trustee) pursuant to Civil Code Section 2941.7.

Grant Deeds are customarily used; Quitclaim deeds are occasionally used but generally are not insurable without underwriter approval.

Yes, Insurance Code 12413.1, 12413.2 & 12413.5 (9-4-19)

A non-title holding spouse or domestic partner is required to join in the execution of a deed or deed of trust unless title is properly held by the vested spouse or domestic partner as his or her sole and separate property. CA has a domestic partnership statute (See CA Family Code Section 297) but does not currently recognize civil unions or marriage other than between a man and a woman.

There is no mortgage tax in the State of California.

(a) Owner’s Policy?
(b) Transfer Tax & Recording Fee?
(c) Survey Charges?
(d) Closing/Settlement Fees?

(a) custom varies from county to county from seller paid to buyer paid to split 50/50;
(b) county transfer tax is generally paid by the seller; as to city transfer tax either the seller pays or split 50/50; seller generally pays for recording the deed and buyer for the deed of trust;
(c) survey is paid by party that needs/requests it;
(d) closing/settlement/escrow fees as to most counties, but not all, are paid by buyer or split 50/50.

Please contact your local underwriter for specific county information.

Policies are countersigned by the issuing agent, and facsimile signatures are authorized.

Taxes are assessed as of January 1 and tax bills are mailed before Nov 1. Taxes are due in two equal installments, the first is due on Nov 1 (becomes delinquent on Dec 10) and the second is due on Feb 1 (becomes delinquent on April 10). If delinquent taxes, with penalties and costs, are not paid within 5 years, the property may be sold.

Property that has been conveyed to new owner, or on which there is new construction, is subject to supplemental assessments.

In addition there are various local taxes.

Please consult a local underwriter for information relating to real estate taxes on the subject property.

Minimum periods of time for a title search –
State law – no
Marketable Record Title Acts – no
Other applicable standards – STG requirement mandated by Bulletins and practices.

Premium includes search and examination so no separate fee is permitted for these items.

Who can be listed as the trustee on the Deed of Trust (e.g., residency and/or natural person requirements, etc.)? Can an underwriter or title agent be designated as the trustee, and, if so, is it customary?

Deeds of Trust. The Trustee can be a natural person or legal entity. There is no residency requirement.

When issuing a Preliminary Report, title commitment, binder or proforma policy in contemplation of the issuance of a CLTA Standard Coverage Policy or an ALTA standard policy, and upon issuance of that policy, the following seven Western Regional Exceptions are required to be reflected in Schedule B:

Western Regional Exceptions:

1. (a) Taxes or assessments that are not shown as existing liens by the records of any taxing authority that levies taxes or assessments on real property or by the Public Records; (b) proceedings by a public agency that may result in taxes or assessments, or notices of such proceedings, whether or not shown by the records of such agency or by the Public Records.

2. Any facts, rights, interests, or claims that are not shown by the Public Records at Date of Policy but that could be (a) ascertained by an inspection of the Land, or (b) asserted by persons or parties in possession of the Land.

3. Easements, liens or encumbrances, or claims thereof, not shown by the Public Records at Date of Policy.

4. Any encroachment, encumbrance, violation, variation, easement, or adverse circumstance affecting the Title that would be disclosed by an accurate and complete land survey of the Land and not shown by the Public Records at Date of Policy.

5. (a) Unpatented mining claims; (b) reservations or exceptions in patents or in Acts authorizing the issuance thereof; (c) water rights, claims or title to water, whether or not the matters excepted under (a), (b), or (c) are shown by the Public Records.

6. Any lien or right to a lien for services, labor, material or equipment unless such lien is shown by the Public Records at Date of Policy.

7. Any claim to (a) ownership of or rights to minerals and similar substances, including but not limited to ores, metals, coal, lignite, oil, gas, uranium, clay, rock, sand, and gravel located in, on, or under the Land or produced from the Land, whether such ownership or rights arise by lease, grant, exception, conveyance, reservation, or otherwise; and (b) any rights, privileges, immunities, rights of way, and easements associated therewith or appurtenant thereto, whether or not the interests or rights excepted in (a) or (b) appear in the Public Records or are shown in Schedule B.

When issuing a Preliminary Report, title commitment, binder or proforma policy in contemplation of the issuance of an ALTA extended policy or a Homeowner’s Residential Policy, and upon issuance of that policy, the following General Mineral Exception and General Water Exception are required to be reflected as separate exceptions in Schedule B:

GENERAL MINERAL EXCEPTION:

Any claim to (a) ownership of or rights to minerals and similar substances, including but not limited to ores, metals, coal, lignite, oil, gas, uranium, clay, rock, sand, and gravel located in, on, or under the Land or produced from the Land, whether such ownership or rights arise by lease, grant, exception, conveyance, reservation, or otherwise; and (b) any rights, privileges, immunities, rights of way, and easements associated therewith or appurtenant thereto, whether or not the interests or rights excepted in (a) or (b) appear in the Public Records or are shown in Schedule B.

GENERAL WATER EXCEPTION:

Water rights, claims, or title to water, whether or not shown by the Public Records.

ALTA Policies are used unchanged. The CLTA Policy is also available.

Title forms and rates must be filed with the California Department of Insurance (www.insurance.ca.gov).

County Transfer Tax - $1.10 per $1,000 of the purchase price less liens and encumbrances at time of sale.

City Transfer Taxes – varies by specific cities that have transfer taxes. Please consult a local underwriter for information relating to city transfer taxes.

Coverage may be available by endorsement dependent on the type of loan, type of lender, amount and purpose of the loan. The general usury limits are found in the CA Constitution Art. 15 and Cal. Civ. Code Section 1916.2-1, et seq. but many variations and exemptions are found in other sections of the CA Code, including Civil, Corporations, Financial, Government and Commercial Codes. Please consult a local underwriter for information relating to usury insurance.

CALFIRPTA requires withholding of three and one/third percent of the sales price.

Witnesses are not required on deeds or deeds of trust except in rare circumstances.