Landrecs.com – Land Title Consulting & Education

The FTC is again extending its enforcement date for the Identity Theft Red Flags Rule from August 1, 2009 to November 1, 2009 according to the FTC Website. This rule was promulgated pursuant to the Fair and Accurate Credit Transactions Act

(FACTA) which was enacted to deal with significant problems of identity theft [...]

Now there are only a BIG FOUR and about 80 Small title insurance underwriters, only three years ago there were a Big Five and more than 100 Small underwriters. And, it is expected that no. will probably continue to drop. The latest change is Attorneys Title Insurance Fund, which has entered into a joint [...]

In addition to real estate fraud, it is alleged that the New Jersey politicians and rabbis also participated in human organ trafficking. And we thought Illinois politicians were the [...]

Between January and May, 16,880 homes in the 7 county Twin City Metro area received Pre-foreclosure notices and the number of notices has been stepping up month by month, according to The Minnesota Home Ownership Center. Detail by county and by month can be found in the MNHOC Website newsletter. Ramsey and [...]

This month in Ohio, House Bill 525 went into effect requiring very strict formatting on documents to be recorded in the recorders’ offices across the state.    Any document that does not conform will be be accepted ONLY if an additional $20 recording fee is paid.  It seems, like many well-intentioned laws, this one too will come with some unexpected consequences.  There are several common practices that may end up costing title companies lots of extra money if they aren’t very careful. 

Basically, the new requirements consist of the following:

• Computer font size of at least 10 point;
• Minimum paper size – 8 1/2 X 11, Maximum paper size – 8 1/2 X 14;
• Black or Blue Ink ONLY;
• No use of highlighting;
• Margins of 1 inch on each side of the page and on the bottom;
• 3 inch margin on the top of the first page, reserved for recorder, auditor, & engineer;
• 1 1/2 inch margin on the top of each of the remaining pages.

It appears as though these requirements are going to be strictly enforced.  It is not sufficient that the printed document conform to the standards; there can be nothing in those margins at all.  Here are a few examples of things that might subject the recording to the additional $25 filing fee that some people may not have considered.

• The title company’s "return to" stamp that lets the county know where to return the recorded document.  These stamps are often placed in the margins.
• The title company’s order number.  Many title companies place their order number on the documents so they can easily locate the corresponding file when the document is returned.
• The borrower’s initials on mortgages.  These are often located in the lower right hand corner of the document in the margin.
• The notary’s stamp.  It may be difficult to place the notary seal far enough into the document to avoid the margins if you are using the crimping-style seal.

These are a few examples of things that may not be thought of when you are examining the documents to see if they meet the requirements of H.B. 525.  It would be easy to overlook any of them.

My personal opinion is that this literal interpretation of H.B. 525 is ridiculous.  If these markings do not interfere with the county’s ability to place their stamps on the document it should not be an issue.  I would even go further to say that H.B. 525 was completely unnecessary!  If there was not enough room on the document for the stamp, the county could have easily just attached a blank page for their recording stamps – at a cost of $8 for the additional page, rather than the statutory fee of $25 for non-conforming documents.  But, common sense is not a commodity found in our legislature. 

The title companies should be aware of the new requirements and any documents that they prepare can be made to conform.  However, there are many documents that the title companies do not prepare and they are stuck with what they get from the lender, or the parties themselves.  This additional $25 fee will be a trap for those parties who attempt to prepare their own documents who don’t have regular contact with the county offices. 

Non-real estate attorneys who prepare documents that may need to be recorded eventually may be a source of non-conforming documents.  Those who prepare trust documents, powers of attorney, affidavits, etc., will hopefully be prepared for these changes.  Contractors who prepare their own mechanic’s liens will also likely find themselves subjected to the higher fees.

This is another product of the modernization of our county offices.  The old stamps were easy to place on the documents where ever there was room.  Today, however, the computers that print the information limit the locations where it can be placed.  Unfortunately, we seem to be subjected to new regulations to accommodate technology, rather than technology being developed to accommodate our needs. 

It will take some time for the industry to adjust to H.B. 525.  Closely review your documents and be mindful of where you place your own stamps and where the document is being executed.  Let’s all try prevent rewarding the county with additional fees for burdening us with needless legislation.

Robert A. Franco
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