requirement. Technically, the title requirement is satisfied by this affidavit of heirship. In reality, the examining attorney should advise the client company of the risks associated with relying on a document outside of the record title given by one or more persons who may or may not be completely truthful. Reliance on the affidavit of heirship causes the entire title to Blackacre to be defensible at best. Once curative data has been accumulated, the client company/examining attorney have several actions available which can be taken with respect to each outstanding title requirement: Waiver of title requirement - Whether a client is justified in waiving a title requirement is a function of management’s evaluation of the problem and whether it is willing to accept all attendant risks associated with the waiver. An examining attorney does not waive title requirements ! If a waiver was appropriate by the examining attorney, the title requirement should never have been placed in the title opinion in the first place. If a title requirement is waived, definitionally the title cannot thereafter be deemed marketable. At best, it could be classified as a defensible title. The examining attorney can adjust the ownership schedule based on the client company’s waiver and protect him/herself from liability with the appropriate limiting language and assumptions made based on the waiver. Example – If the title requirement was to furnish the probate materials from another state for one of the potential mineral owners who died over 80 years ago, and the client believes that all potential devisees have been located and leased, it may elect to waive the title requirement. The examining attorney can craft language to protect itself such as: “This requirement called for the probate materials for the estate of John Doe from Orleans Parish, Louisiana to be furnished. No such materials were submitted. However, O Oil Company has elected to waive this title requirement based on the passage of time from X’s death and its present leasing activities from X’s purported devisees.
The undersigned cannot state, with any degree of confidence, whether there may or may not be additional devisees for John Doe. You are advised that waiving this title requirement is a risk decision: (i) concerning the accuracy of the list of devisees furnished the undersigned by the client as set forth in the title opinion and (ii) by relying on the list of purported devisees you are relying matters outside of record title, thus destroying marketable title to the Examined Lands and leaving you, at best, with defensible title to Examined Lands. Please advise if additional input or information regarding this requirement may be provided.” Example – The title examiner calls for an heirship affidavit for Fred Farkle who appears to have died intestate. An affidavit of heirship is furnished by Alton Farkle, a Farkel family member. Alton Farkle’s affidavit can be wrong for many reasons, especially if the affiant is related in some way to the deceased. Either the affiant did not know of any additional children or, if he/she knew, also “knew” that Fred Farkle did not want them to inherit anything so…. they are omitted from the affidavit of heirship. That risk that the affidavit of heirship is not accurate is a risk assumed by the client company, not the examining attorney. However, to be assumed by the client company, such risk must first be specifically pointed out by the examining attorney when addressing a specific title requirement. Ex. – “This requirement called for an affidavit of heirship for the estate of Fred Farkle. Affidavit of Heirship for Fred Farkle dated 1/22/21, signed by Alton Farkle, has been submitted in satisfaction of this requirement. The actual production of the affidavit of heirship does satisfy the requirement. However, the undersigned cannot state with any degree of confidence whether there may or may not be additional heirs at law for Fred Farkle. You are advised that relying on matters outside of the record title entails a risk decision: (i) concerning the accuracy of the list of heirs set forth in the title opinion and (ii) by relying on the heirship affidavit you are relying on matters outside of record title, thus destroying marketable title to the Examined Lands and leaving you, at best, with defensible title to Examined Lands.”
20
N at i onal A ssociation of D i v i s i on O rder A nalys t s
Made with FlippingBook. PDF to flipbook with ease