Your closing costs might include two types of title insurance policies, but do you know how these policies differ. Title insurance policies include:

  1. Lender’s policy
  2. Owner’s policy
Lender’s Policy

If you’ve ever mortgaged a home, chances are you were required to purchase a title insurance policy. This lender’s policy (often called a loan policy) is required by most lending institutions as a way to insure their security interest in the property. This policy protects the bank or other lending institution for as long as they maintain an interest in the property (typically until your mortgage is paid off).

Owner’s Policy

However, as a buyer, you also want to protect your investment — and the ownership rights that come with it. This is why it’s wise to purchase an owner’s policy of title insurance, which will protect your rights as the homeowner for as long as you or your heirs have an interest in the property.

Both title insurance policies not only pay valid claims and legal fees to defend against hidden title issues, but also help to decrease ownership risks by providing a thorough title search prior to the issuance of either policy.

Refinance Transactions

If you’re considering refinancing your mortgage, you may be surprised to see that you are required to purchase a new lender’s policy of title insurance. This is because a lender’s policy only provides coverage for the life of a loan. When a home is refinanced, the life of one loan ends and another begins. Thus, a new lender’s policy for title is required. Because an owner’s policy provides coverage for as long as you or your heirs hold an interest in the property, there is no need to purchase a new owner’s policy when refinancing.

Andy Segrest
Attorney
RANDALL | SEGREST

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Mississippi landlords are likely to be pleased with Senate Bill 2473, which was adopted in the 2018 Legislative Session and became effective July 1, 2018. The new law makes landlord-friendly changes to the Residential Landlord Tenant Act (Section 89-8-1 et seq. of the Mississippi Code) and to the statutes addressing eviction of tenants in Sections 89-7-1 et seq. The most significant change, both to the eviction process and way that landlords draft their leases, provides that notice of default may be sent by email or text if the parties have agreed in writing to these methods of notice. Also, the notice required to be given when a rental agreement is breached has been decreased from 30 days to 14 days.

Other changes to the eviction statutes include protecting the landlord’s rights to collect late fees in addition to overdue rent by expanding the definition of “rent” to include any late fees that a defaulting tenant is required to pay under the rental agreement. Also, the law permits the landlord to evict for any event for which the lease provides eviction as a remedy, rather than only for holding over or failure to pay rent.

Provisions in the new law sought to speed up the eviction process and remove discretion from the judge. Under the revised statute, hearings for eviction due to the nonpayment of rent are not be continued beyond 45 days from the date of filing. Section 89-7-49 has been amended to remove the discretion of the judge to put the landlord in possession of the premises when a tenant fails to pay rent. The legislation requires that any judge “presiding over a hearing in which a landlord seeks to remove a tenant for nonpayment of rent shall abide by the provisions of the rental agreement that was signed by the landlord and the defaulting tenant.”

Bradley Reeves
Attorney
RANDALL | SEGREST

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Have you ever wondered why the document used to convey title to real estate is called a “deed”? The word’s meaning derives from what I consider to be one of the coolest legal ceremonies in our tradition – the “Turf & Twig Ceremony” earlier known as “Livery of the Seisin”. In that ceremony, which dates back to medieval Europe but was also used in Colonial America, the buyer and seller accompanied by witnesses would meet at the property. The seller would dig up a clump of turf and then break a twig off a nearby tree and stick it in the turf.  The buyer would deposit the purchase money in the hole left by the excavated turf. The seller would then tickle the buyer’s hand with the twig (for blind buyer’s) and pass the turf and twig to the buyer while stating his intent to convey the property.  This was the “deed” that conveyed the property.  I once considered implementing this into my real estate closings, but abandoned the idea after negative feedback from realtors.

Click below to watch a reenactment of the ceremony:

Matthew Vitart
Attorney
RANDALL | SEGREST

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I am frequently asked if the settlement agent collects property taxes at closing to pay directly to the tax collector. Typically, the settlement agent does not collect property taxes unless they are currently due. In Mississippi property taxes are due when billed but delinquent after February 1 of the following tax year. If your closing occurs between November and February 1 and taxes have not been paid, then the settlement agent will usually collect property taxes and pay them directly to the tax collector. They will also collect any delinquent taxes and penalties and pay those to the tax collector.

However, in most closings the seller gives the buyer a credit for the share of unpaid taxes from January 1 through the closing date, which is called proration. In Mississippi property taxes, and where applicable city or municipal taxes, are paid in arrears. Therefore, taxes are typically estimated using the tax bill from the prior year. Every closing is different; however, this is how property taxes are normally handled.

It is also important to note that homestead tax rates are determined by the status of the property as of January 1 of the tax year. The name of the person or entity who owned the property as of January 1 will typically also be listed as the owner on the tax bill.

Gretchen Gentry
Attorney
RANDALL | SEGREST

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