Echelon Title Services in Brevard County & in the state of Florida
Echelon Title Services facilitates all of the functions and tasks typically performed by a title insurance agency in Florida, including acting as closing agent, escrow agent, and title agent for real estate sales and purchases, as well as mortgage refinances.
From holding the initial escrow deposit through execution of closing papers, recordation of the deed in the public land records, and issuance of the title insurance policy, and every little thing in between, Echelon Title Services handles everything typically involved in a Florida real estate closing.
Key functions/tasks which Echelon Title Services handles are:
Holding Escrow (Deposit)
Echelon Title Services holds the deposit (sometimes referred to as “earnest money” or “good faith” deposit) due under the contract in escrow until closing pending the performance by each party of its obligations under the contract.
Most commonly the deposit is refundable to the buyer within a given period of time after the effective date of the contract during any inspection or financing contingency period provided in the contract, and is typically credited to the buyer toward the purchase price at closing.
If the contract is canceled or terminated prior to closing, the funds are typically disbursed to either the buyer or seller (or split between them) in accordance with a ‘release and cancellation’ in which both the buyer and seller mutually agree to terminate the contract, release each other and their brokers(s) / agent(s) from any liability under the contract, and direct the disposition of the funds.
As escrow agent, we cannot refund or otherwise disburse funds deposited on a purchase and sale contract until we receive matching written instructions signed by both the buyer and seller directing the disposition of the funds.
Researching Status of Title, Providing Evidence of Title, and Insuring Title
Echelon Title Services will conduct or obtain a title search of the property and produce a ‘commitment for title insurance’ (also called a ‘title commitment’) detailing the legal description of the property, the current status of record title to the subject property, the terms and conditions of the title insurance policy or policies to be issued in connection with the real estate transaction, including the requirements to be fulfilled before the policies can be issued, as well as the exceptions and exclusions from coverage.
In a typical buy-sell transaction, we issue two policies of title insurance: 1) An owner's policy ensuring that the buyer is the owner of the property; and 2) If applicable, a lender’s policy ensuring that the lender has a first lien position mortgage on the buyer’s property. If the buyer is paying cash then we only issue an owner’s policy.
Typically, purchase and sale contracts require ‘evidence of title’ to be provided to the buyer prior to closing so that the buyer can review and state any objections to the status of the seller’s title. In the not too distant past, this was done by an ‘abstract of title’ (which is still done in some localities) which included copies of all deeds and other documents in the chain of title or otherwise affecting the status of title. In the modern era this is done by a ‘commitment for title insurance’ which is basically an offer from us as agent on behalf of the underwriter to provide one or more policies of title insurance, under certain terms, conditions, exceptions, exclusions, etc.
The Commitment for Title Insurance
The commitment for title insurance is broken down into three main parts called Schedule A, Schedule B-1, and Schedule B-2.
Schedule A generally contains the following information:
- The effective date of the commitment. This is the most recent date through which the details of newly recorded documents are available to the title examiner. A document recorded in public records today will not be reviewable by a title examiner for a period of time which is referred to as the "gap". The length of the gap varies from county to county. Prior to closing we will take another look in the public records to confirm that nothing has been recorded since the initial search, and to bring the effective date forward to be a close as reasonably possible to the actual closing date. In Florida, we insure this gap period so that you are insured as soon as your funds are disbursed to the seller, and it is our responsibility to record the closing documents (deed & mortgage etc.) as expeditiously as possible to minimize the actual gap.
- The name(s) of the proposed insured(s). This is typically the buyer and/or lender.
- The amount(s) of coverage. This is typically the purchase price and/or loan amount.
- The current status of title (ownership) of the property as of the effective date of the commitment. This will only reflect what has been recorded in the public records. For example, if someone dies, a title examiner has no way of knowing that fact unless a certificate of death has been recorded in the public records.
- The legal description of the property being insured (sometimes the legal description is shown on a 'Schedule C').
Schedule B - Section 1
Schedule B - Section 1 (typically simply called ‘B1’ to people in the business) lists the ‘requirements’ to be fulfilled before the policy of title insurance can be issued. Typically the requirements include:
- Payment of the purchase price by the buyer to the seller.
- Provision of the mortgage loan funds to the buyer by the lender (if applicable).
- A deed from the seller conveying title to the property to the buyer.
- A mortgage from the buyer to the lender encumbering the property. The lender 'gives' a loan and in exchange the buyer/borrower gives the lender a promissory note and a mortgage on the property.
- An affidavit from the seller affirming that the seller has not undertaken various actions as would cause interests of other parties to attach to the property, but which are not reflected in the public records. This is sometimes referred to as a gap affidavit.
- Satisfaction or release of any mortgages or other liens that currently encumber or attach to the property.
- A survey of the property.
- Payment of any outstanding due or unpaid real estate taxes.
In addition to the foregoing standard requirements, any given title commitment will include requirements regarding any number of matters which are unique to the property (and the owners) that affect status of title to the property. Examples of additional requirements can include:
- Procurement of corrective deeds or affidavits due to apparent deficiencies in previous conveyances.
- Recordation of death certificate(s) of deceased persons in the chain of title.
- Production, review, and recordation of trust, business entity, or court documents that are not in the public records, such as material settlement agreements in dissolution of marriage actions, probate, guardianship, bankruptcy, or any other court proceedings affecting title to the property or persons in the chain of title.
Schedule B - Section 2
Schedule B - Section 2 (typically simply called ‘B2’ to people in the business) lists exceptions to the policy to be issued, i.e. matters which are not going to be covered.
The exceptions to the policy typically involve some manner of right(s) (but not ownership) in favor of third parties to make some use or charge upon the land, and are generally things that people don’t often think about but make sense for the orderly use and development of real estate.
Some common examples include:
- Restrictions on use of the land (for example requiring residential use only).
- Declaration of covenants and restrictions, homeowners association and declaration of condominium and all amendments, including rights of assessments and enforcement by lien rights for non-payment thereof.
- Easements of other parties to enter or use the land (such as water, electric, cable utilities) and other utility agreements such as water and sewer service (and enforcement by lien rights for assessment and liens for non-payment therefore).
- If the land is platted, there will be an exception for 'any matters noted on the plat'.
- Boundary line and other private agreements between neighboring properties such as a shared well or private roadway agreements.
- State regulatory orders and local government ordinances approving a plan of development, vacating streets, or granting a 'variance' of some zoning or other requirement of the local building code.
- Community development district, drainage district and other arrangements for the provision of some service to the property (and usually provision for enforcement by lien rights for non-payment therefore).
Also on Schedule B - Section 2 of the commitment are the ‘standard exceptions’ which are usually deleted on the final title policy (but which might not be deleted depending upon the unique circumstances of the closing).
An example of the standard exceptions is the general ‘survey exception’ for any matters which would be shown by a current, accurate survey of the property. If no survey is provided, then this exception will also be on the title policy. If a survey is provided, then the general survey exception will be deleted, but replaced with a specific survey exception such as ‘matters shown on survey by Jones Surveying, Inc. dated June 12, 2021, including but not limited to brick paver driveway encroaching over utility easement along west/front of the property and 6’ wood fence encroaching into drainage easement on north side of property’.
Another example of a standard exception which will not be deleted and will be on the policy is the exception for ‘real estate taxes not yet due and payable but becoming due in future years’.
If you have any questions about a title commitment issued by Echelon Title Services, please consult your closer or a member of our management.
Obtaining Estoppel Letters from Homeowners and Condominium Associations
If the property is located within a homeowners association or condominium association community, an ‘estoppel letter’ will be required from each association which affects the property.
An ‘estoppel letter’ is a written statement from the association (or its manager/agent) confirming the amount, payment frequency, and status of payment of the regular dues, whether any special assessments have been levied by the association and the amount and due date etc., and whether the property is in compliance with the restrictions or if there are any violations, whether there are any rights of first refusal or approval of the buyer is required before closing may proceed.
Title companies need estoppel letters to make sure the account is current at closing.
The figures and other statements made in the estoppel letter are binding on the association. Because title companies rely on the statements made in the estoppel letter, the association is said to be ‘estopped’ from claiming other than as stated in the estoppel letter. Stated plainly, the estoppel letter prevents an association from coming back after closing and claiming that more funds are due than as stated in the estoppel.
The law allows the association (or its agent/management company) to charge a $250.00 fee for preparing the estoppel letter. Additional fees can be charged for any requested expedited (‘rush’) delivery of the estoppel letter.
The law allows the association 10 days after receiving a written request to provide the estoppel letter.
If the estoppel letter reveals monies owed, the funds will be collected from the seller’s funds at closing and remitted by Echelon Title Services directly to the community association along with a copy of the deed so that the association can update its records to reflect the change of ownership.
If the estoppel letter reveals any violations of the community covenants and restrictions these will generally need to be brought into compliance before closing can take place, although often the association will provide a buyer with a limited grace period after closing within which to bring the property into compliance after closing.
Obtaining Mortgage Payoff Statement(s)
Echelon Title Services will obtain a written payoff statement from any party holding a mortgage or other lien on the property so that the proper amount of funds are collected at closing and remitted to the mortgage or other lien holder to satisfy the debt and have the mortgage or other lien released from the property.
As with estoppel letters from community associations, title companies rely on written payoff statements from mortgage holders to make sure that sufficient funds are collected from the seller at closing to satisfy the debt so that a 'satisfaction of mortgage' can be recorded in the public records to release the lien of the mortgage from encumbering title to the property.
In reliance on the payoff statement provided by the mortgage holder, the funds necessary to pay off any mortgages on the property are deducted from the funds otherwise due to the seller, and are remitted from Echelon Title Services directly to the mortgage holder, usually by wire transfer very soon after closing to keep further interest from accruing on the debt.
Under section 701.04 of the Florida statues, the mortgage holder has 14 days after receiving a written request within which to provide a written mortgage payoff statement.
Any ‘owner of record’ is entitled to a payoff statement even if the owner is not the original borrower who signed the mortgage, as is often the case with inherited property.
The law provides a mortgage holder 60 days after receipt of the funds within which to provide a satisfaction or release of mortgage to be recorded in the public records of the county (or counties if multiple) where the collateral / mortgaged property is located. Most lenders file the satisfaction or release of mortgage electronically, directly with the county recording office. In the not too distant past the lenders would send these documents by mail to the title company or worse yet to the homeowners who did not understand that the document needed to be recorded in the county public land records.
After closing Echelon Title Services will monitor the public records filings to confirm that the mortgage holder has in fact released the mortgage.
Occasionally on a title commitment we see a requirement to obtain a satisfaction or release of a mortgage that was previously paid off in a previous sale or refinance on the property but for which no satisfaction or release was filed (or if the release document was improperly drafted or signed by the wrong party or filed in the wrong county, or mis-indexed by the clerk of the court or county recorder, all of which are real life examples). This is another example of the kind of thing that title insurance covers.
Imagine you go to sell your property 10 years after the time of purchase and you find out that your seller’s mortgage (or a previous owner’s mortgage, most of which are good for 30 years) was never filed. Your title insurance policy would (most likely) cover this circumstance, and the closing would proceed without delay from the lack of a satisfaction of the old stale mortgage.
Preparation of Closing Statement
Echelon Title Services will prepare a closing statement which includes and reflects all closings costs, prorations of property taxes and assessments, and any other relevant items such as homeowners or condominium association dues, mortgage payoffs, transfer fees, documentary stamp tax, intangible tax, recording fees, fees to third party service providers such as surveyors, appraisers, home inspectors, pest inspectors, home warranties, and anything else required by the contract, the lender’s requirements, and the circumstances.
If the transaction is a cash purchase, we typically use the ALTA closing statement form as the sole closing statement.
If there is mortgage financing involved in a transaction, the lender is responsible for preparation of the Buyer’s ‘Closing Disclosure’, which is required by federal mortgage regulations (Dodd-Frank, Truth in Lending, etc.) to be provided to the buyer/borrower at least three business days prior to closing.
The mortgage lender is responsible for and will make arrangements for delivery of the closing disclosure directly to the buyer/borrower prior to closing.
Echelon Title Services will work with the mortgage lender to make sure all relevant figures are included and that the file is in balance.
PREPARATION OF CLOSING DOCUMENTS
Echelon Title Services will prepare the deed of conveyance (typically a warranty deed) and the other documents required under the contract, the title commitment, and general law. These include but not limited to the customary owner’s affidavit of no liens, bill of sale, non-foreign certification, and other documents as required by circumstances unique to the transaction and the status of title.
COORDINATION WITH LENDER
While many buyers pay cash, most buyers finance the purchase of real estate with mortgage financing.
Echelon Title Services will communicate directly with the buyer’s lender, provide the lender with any required documentation related to the property, and assist the lender in its preparation of the ‘closing disclosure’ to make sure that all costs (including prorated taxes and other items) are properly reflected and ‘balanced’.
NOTARIZATION OF DOCUMENTS
In most closings, there are many documents which must be notarized.
If you are attending closing ‘in person’ and signing the documents at our office, Echelon Title Services will notarize all closing documents at no additional cost.
If you are not attending closing in person and not signing your documents in our office, our staff can assist you in the procurement of notarial services (additional fees may apply - inquire with your closer for details).
RECEIPT AND DISBURSEMENT OF CLOSING FUNDS
Echelon Title Services maintains an escrow account for the receipt and disbursement of the closing funds, which will include the earnest money deposits called for by the contract prior to closing, the buyer’s funds due at closing, and the mortgage lender’s funds, if applicable.
Upon closing, all funds received from the buyer and lender are disbursed in accordance with the closing statement.
These funds include the seller’s proceeds, but also often include the seller’s mortgage payoff funds, real estate taxes, homeowners or condominium association dues, recording fees and applicable taxes on the deed and mortgage, homeowners insurance, brokerage commissions, and other fees due to third party vendors such as surveyors or appraisers.
We take the duty of receiving and disbursing the funds of others very seriously and consider it among the most serious of responsibilities we have as a title agency.
Our escrow account is reconciled on a monthly basis by an independent third party. The reconciliation report is submitted to our underwriters for review immediately upon its production by the independent third party. We do not receive an advance copy.
RECORDING OF DEED AND OTHER REQUIRED DOCUMENTS in public land records
After closing, Echelon Title Services will submit to the county recording office the deed, mortgage (if applicable), and any other documents required to provide the buyer with clear and marketable title.
Most counties in Florida now accept recordings to be submitted electronically.
Echelon Title Services records by electronic means in all counties which accept recordings to be filed electronically.
Echelon Title Services obtains the requisite information from the parties at closing to determine whether 1099 filing is required on any given buy sell transaction, and if required, Echelon Title Services files the 1099 information with the IRS.
This is done one time each year through a single digital batch filing done directly with the IRS.
The seller will be provided with copies of Substitute Form 1099-S at or after closing. If you need additional copies after closing, please contact our office.