Category: Real Property

Home Protection

What to Do With a Residence Upon Death

Dear Sophos

 I am acting as Trustee for my dear dead Aunt Betsy.  One of the Trust assets is her California residence.  What are some of my fiduciary duties and what should I be doing with the house?

 Little Johnny

 

Dear Little Johnny:

First, as Trustee, you have a general duty to secure the residence and to preserve its value.

Assuming that the house is not passing to a specific beneficiary, after the initial 120 Notice period, you should consider liquidating, selling, the house.

During the initial 120-day period of administration, I suggest that, at a minimum, you do the following:

  • Make a detailed inventory of the house content, by photos or video, remove and secure any personal property of substantial value and empty the refrigerator;
  • Have a Locksmith change all of the locks and give you the keys;
  • Have all mail forwarded to your address and stop any newspaper delivery
  • Install an inexpensive security system that will automatically contact the security company if there is a break-in;
  • Have the yard regularly maintained, as though someone was living in the residence;
  • Talk to the neighbors and leave your telephone number with them in the event of an emergency;
  • Install a timer on several lamps, set to go on and off at different times;
  • Find the homeowner’s insurance policy and contact the insurance agent to be certain that the coverage is adequate;
  • If appropriate, have a plumber “winterize” the house;
  • Timely pay the monthly utility bills and loan payment as well as any homeowner’s association fees or at least contact the vendors to explain the circumstance.
  • Obtain legal advice from an attorney experienced in the area of trust administration.

I hope that you find this advice helpful and good luck in your capacity as Trustee.

The Sophos

Real Property Contract Photo

To Buy or Not to Buy – Unwrapping Title Insurance

Title insurance is one of the great mysteries when buying or selling real property.

In California, rarely does someone purchase residential real property without title insurance included.  Almost as rarely does the Buyer know why title insurance is being purchased and what coverage the insurance provides.

Basic title insurance questions include: do I need title insurance; who pays the premium; and what does the insurance do for me?

The answer to the first two questions are simple . . . yes, Buyers in California need title insurance to be certain that they are buying property with marketable title and, generally, the Seller pays the premium for the Buyer’s title policy through escrow, based upon the selling price, and the Buyer pays the premium for Buyer’s lender’s title policy based upon the amount borrowed by the Buyer to purchase the property.

The simple answer to what does it do for you, is that Title insurance protects against losses due to defects in title.

But that answer is misleading because in California there are three different insurance coverage levels, depending on the type of residential title insurance policy that is purchased.

Based upon this chart, provided by Fidelity National Title chart, the best title insurance choice for a Buyer is the ALTA Homeowner’s Policy, as it provides the broadest coverage.

 

Coverage Item

CLTA Standard Coverage

ALTA Residential (Plain Language)

ALTA Homeowner’s Policy

Post Policy Forgery Protection

No

No

Yes

Enhanced Access Coverage

No

No

Yes

Building Permit Violations

No

No

Yes

Subdivision Map Act Coverage

No

No

Yes

Restrictive Covenant Violations

No

No

Yes

Mineral Extraction Coverage

No

No

Yes

Map Inconsistencies Coverage

No

No

Yes

Coverage Extended to Living Trusts

No

No

Yes

Enhanced Encroachment Coverage

No

No

Yes

Automatic Inflation Protection (5 years)

No

No

Yes

Helpful online article on Title Insurance

I recently came across this article which includes an example of why every Buyer should insist on and obtain an ALTA Homeowner’s Title insurance policy when purchasing residential real property.

Click here to read this article.

El Niño Rain on Roof

Are you ready for El Niño? More Importantly, is your home ready?

An El Niño continues to be predicted for California during this 2015-2016 winter storm season. This means the possibility of storms of major impact and far above-normal rainfall.

While there is no assurance that an El Niño will result in snow pack and rain far above “normal” levels, many in California will see the occurrence as positive, perhaps even an end to California’s prolonged drought, a condition that is having a major effect on the state’s commerce and economy.

How would an El Niño impact a San Diego County homeowner and what pre-planning steps should be undertaken . . . before our storm season arrives?

Homeowner’s Insurance:

Most homeowners have property damage insurance on their dwelling. Does your homeowner’s insurance provide coverage for water damage? Maybe yes, maybe no. Locating your insurance policy is usually the first hurdle to cross. Once your policy is in-hand, consider calling your insurance agent to discuss your coverage. Ask if you have coverage for damages caused by water intrusion resulting from rain.

If the answer is “no,” discuss the cost of adding such coverage.

If the answer is “yes,” your next question is: “Are there conditions to the coverage?” Insurance policies frequently require the storm to cause damage to the roof or structure first, thus allowing the rain into the home, before providing rain damage coverage.

Stated another way, if a home has a damaged roof prior to a damaging rain storm, insurance coverage will likely be denied. Make sure you understand your insurance policy. One method to do this is to explain your understanding of your policy coverage to your insurance agent, in your own words, so your agent can clarify any misunderstandings.

Roof Condition:

Water intrusion from a leaking roof is a major source of damage during periods of heavy rains. Water intrusion naturally leads to numerous consequential damages to both personal property and the residence. Warped dry wall, bulging ceilings and mold are just a few of the structural issues that may occur. Water damage to artwork, antiques, carpet and rugs can be devastating.

When did you last have your roof inspected? Now is a good time to schedule an inspection, including a written report and photographs. You will avoid worrisome stormy nights if you have your roof inspected and repaired before the storms arrive.

Roof Gutters and Drains:

Cleaning drains is a necessary fall chore, of greater importance with an El Niño predicted. Gutter seams should be visually inspected to be certain there is no evidence of water leakage, requiring repair.

Once the rain water goes into the gutter and down the drain, where does that fast moving water end up? Do your downspouts end at the foundation of your residence, allowing water to pool against the house, or worse, undermine the foundation?

Downspout extenders, to move water away from foundations, are readily available from hardware stores and online.

Windows and Doors:

Are your windows and doors watertight from wind-blown rain? Both can be easily checked with a garden hose spraying water on the doors and windows. If the current drought causes your conscience to not allow you to “waste” water to check for water tightness (perhaps not a waste in the long run), then visually inspect doors to be sure there are no gaps where daylight is showing.

With windows, be certain that windows shut tightly and look at the condition of the weather stripping. Replaced weather stripping on doors and windows will go a long way to keep rain out of the house, with the added benefit of keeping warm air in the house during colder weather.

El Niño could help California – just make sure you help your home stay ready.