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Eyes Wide Shut continued
In understanding title, you were told early on about the difference between actual notice and constructive notice. And those two concepts aren't so hard to understand, but the title office also has to deal with what you might call office notice or what the court's have labeled inquiry notice. This includes everything from those things that office personnel see or don't see in recorded documents, what is seen and heard in the office or on the street, and what should office personnel be thinking about or looking for as they process an order/file. Is there something else that needs to be known? How do these then affect your Title Plant, Office Operations, Escrow Closings and Title Insurance Underwriting?
In the title office, you deal daily with recorded documents, court cases, taxes, etc. (matters of constructive notice) and, in some cases, items of actual notice, i.e. the contract, the parties, the property involved, the survey, etc. But, are your EYES WIDE SHUT when you enter them into your indexes and abstracts or process the escrow/title file? It takes time and effort to develop an office staff that is experienced and prudent enough to be alert and mindful of those inquiry notices that are around every corner. Does the document being indexed need special attention? When abstracting, is there something not seen, is there another document(s) that will answer the question(s) you (or the examiner) have? Does a clause in a contract or something the seller said call for special action or study? Is there more information that is needed before completing the work?
Our title insurance underwriters have long preached about having eyes and ears open as you process escrow files. Attention and alertness for fraud, forgery, developing title or escrow problems that can be stopped before they fully develop, calls for a well-trained staff. These items too involve your office notice.
Remember, in the title office, everything is notice. If it's in your title plant at all, you have notice. If it was told to an employee, or they saw a document, you have notice. But the question often should be 'should further inquiry be made or is there a need to look further in your title plant, have you satisfied all possible inquiry notice requirements?'
Here are some ideas to think about in considering whether your office is operating with EYES WIDE SHUT or WIDE OPEN:
1. Entry into title plant/abstract of recorded documents that are more than what they are titled (i.e.: Deeds, plats, etc. that create/reserve easements or other interests (life estates); Documents with reservations or restrictions, reverter language; Additional parties evidenced by given information in a document such as a/k/a, f/k/a/, n/k/a, successor ...; Documents with incorrect but determinable legal descriptions; Documents with no legal description; Documents referred to in other documents.)
2. Documents involving a party that office personnel knows is subject to a name change (marriage or divorce, mergers, etc. is what we have in mind here) — how to handle in indexing and abstracting? Researching "chains of title" on mortgages, easements, etc.
3. Developing knowledge of the office staff in being familiar with the county, property, parties, abstracting rules, title insurance and escrow procedures, etc. (It's too late when all the "old timers" have retired!)
4. Use of abstracter's note. To do or not to do? Make sure of proper use, conflicts, etc.
5. How is our technology affected by/affecting all these things?
Use these ideas and others to hold a discussion on office practices and procedures with your general counsel and your office staff. Make your office one that is fully alert and watching for some of those hidden traps that can make you a victim of a failure to recognize your inquiry notice requirements. Don't let "I didn't think of that" or "I wouldn't know to look for that" be the excuses given after the fact. Be sure your staff has all the tricks of the trade and training necessary to operate EYES WIDE OPEN.
You might want to keep these definitions from the Oklahoma Statutes in mind: O.S. TITLE 25. Chapter 1
1. TYPES OF CARE — Slight care or diligence is such as persons of ordinary prudence usually exercise about their own affairs of slight importance; ordinary care or diligence is such as they usually exercise about their own affairs of ordinary importance; and great care or diligence is such as they usually exercise about their own affairs of great importance. — Section 4
2. TYPES OF NEGLIGENCE — Slight negligence consists in the want of great care and diligence; ordinary negligence in the want of ordinary care and diligence; and gross negligence in the want of slight care and diligence. — Section 6
3. TYPES OF NOTICE — Actual Notice consists in express information of a fact. Constructive notice is notice imputed by law to a person not having actual notice. Every person who has actual notice or circumstances sufficient to put a prudent man upon inquiry as to a particular fact, and who omits to make such inquiry with reasonable diligence, is deemed to have constructive notice of the fact itself. — Sections 10, 11, 12 & 13
4. EVERY CONVEYANCE OF REAL PROPERTY— acknowledged or approved, certified and recorded as prescribed by law from the time it is filed with the register of deeds for record is constructive notice of the contents thereof to subsequent purchasers, mortgagees, encumbrancers or creditors. — Section 16
Review CASE LAW if required to see how these can affect your office's liability and responsibility.
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