THE TITLE EXAMINER
1.1 Examining Attorney’s Attitude
The purpose of the examination of title and objections, if any, shall be to secure for the examiner’s client a title which is in fact marketable and which is shown by the record to be marketable and subject to no other encumbrances than those expressly provided for by the client’s contract. Objections and requirements should be made only when the irregularities or defects reasonably can be expected to expose the purchaser or lender to the hazard of adverse claims or litigation.
Comment: Title Standards are primarily intended to eliminate technical objections which do not impair marketability and some common objections which are based upon misapprehension of the law. The examining attorney, by way of a test, may ask after examining the title, what defects and irregularities have been discovered by the examination, and as to each such irregularity or defect, who, if anyone, can take advantage of it as against the purported owner, and to what end. For example, the omission of the zip code of the property in the description thereof in a conveyance is not a material defect for which an objection should be raised. To enter an objection of such nature is considered to be “fly specking” or to be over-meticulous in the examination of the title. Title Standards, if properly utilized, should reduce to a bare minimum, if not eliminate, “fly specking and overmeticulousness."
1.2 Prior Examination
When an attorney discovers a situation which the attorney believes renders a title defective and he/she has notice that the same title has been examined by another attorney who has passed the defect, it is recommended that the attorney communicate with the previous examiner, explain the matter objected to, and afford an opportunity for discussion, explanation, and correction. The attorney contacted should cooperate fully and promptly in investigating his/her records and taking whatever steps are necessary to explain and/or correct the title defect complained of.
Comment: It is ethically incumbent upon the attorney raising the objection, prior to discussing the objection with the client, to locate the prior attorney, to discuss same with that attorney in order to afford that attorney an opportunity to explain what steps, if any, had been taken to clear the objection and to offer the prior attorney the opportunity to clear the objection. In discussing the objection with the prior attorney, the current policy had been issued insuring against any loss by reason of such defect. If the title company will insure the purchaser against any loss by reason of such defect, should the transaction involve a purchase, or if the title company will insure the lender against any loss by reason of such title defect, should the transaction involve only a loan, the attorney might consider recommending the purchase of the title insurance as a solution to the title objection. However, the attorney should counsel his/her client as to the distinctions between marketable title and insurable title and the possible consequences of failing to obtain a marketable title.
Under the provisions of the 1994 amendment to O.C.G.A. Section 44-2-14, any affidavit, prepared under O.C.G.A. Section 44-2-20, and any instrument by which the title to real property or any interest therein is conveyed, created, assigned, encumbered, disposed of, or otherwise affected, which is executed on or after July 1, 1994, shall not be entitled to recordation unless the name and mailing address of the natural person to whom the affidavit or instrument is to be returned is legibly printed, typewritten or stamped upon the document at the top of the first page thereof. If any instrument or affidavit is titled or recorded without compliance with this amendment, such noncompliance does not alone impair the validity of the filing of recordation of or the construction notice imparted by filing or recordation.
1.3 Reference to Title Standards in Sales Contract
An attorney drawing a real estate contract is urged to recommend that the terms of the contract provide that marketability be determined in accordance with Georgia Law as supplemented by Title Standards then in force and that the existence of encumbrances and defects, and the effect to be given to any found to exist, be determined in accordance with such Standards. An attorney drawing a real estate sales contract is urged to recommend inclusion of the following clause or its equivalent: It is understood and agreed that the title herein required to be furnished by the seller shall be good and marketable and that marketability shall be determined in accordance with Georgia law as supplemented by the Title Standards of the State Bar of Georgia. It is also agreed that any defect in the title which comes within the scope of any of said Title Standards shall not constitute a valid objection on the part of the buyer provided the seller furnishes the affidavits or other title papers, if any, required in the applicable Standard to cure such defect.