ILTA Standards Committee Meeting The Holiday Inn & Suites Des Moines, IA Sunday, May 7, :00 PM

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1 ILTA Standards Committee Meeting The Holiday Inn & Suites Des Moines, IA Sunday, May 7, :00 PM Members Present: Kevin Christie, Mary Dawkins, Dave Erickson, Brent Harstad, Dan Kadrlik, Mark Mallicoat, Marcia Olson, Lynette Thompson, Matt White, and Beverly Wild Chairperson Mary Dawkins, called the meeting to order. Two new members of the Committee were welcomed Dave Erickson and Matt White. Questions: 1. Question: An equity line of credit mortgage by Washington Mutual Bank is filed. There is a paragraph contained within the mortgage that states: In addition to the Debt secured by this Mortgage, this Mortgage shall also secure and constitute a lien on the Property for all future advances made by Lender to Borrower for any purpose within 20 years after the date of this Mortgage, just as if the advance made by were made on the date of the Mortgage. Any future advance may be made in accordance with the terms of the Credit Agreement or at the option of the Lender. The total amount of the indebtedness that may be secured by this in accordance with the terms of the Credit Agreement or Mortgage may increase or decrease from time to time but the total unpaid balance secured at any one time by this Mortgage shall not exceed two times the maximum credit limit that is set forth in Paragraph 2 of this Mortgage, together with accrued interest and all of Lender's costs, expenses and disbursements made under this Mortgage. Would we be required to show this? Answer: Show future advances clause, and let the Examining Attorney decide the legality. Comment: Just because the loan is paid down to zero, does not mean that the mortgage is automatically released. 2. Question: Mom owns property. She conveys one-half remainder interest to #1 Daughter. She conveys one-half remainder interest to #2 Daughter. #2 Daughter conveys remainder interest to #1 Daughter. How is property held? We don t know who to list for owners on our title report??? Answer: There is a life estate in Mother with remainder interest in Daughter #1. 3. Question: Can you use a patent from the State filed in 2004 as a root title instrument? Answer: The vast majority of the committee said No. However, it has been known to happen.

2 4. What do we do with documents that were recorded using SS#s? Answer: Do not show SS#s. If making a copy, blacken out SS#. You might use the information to determine if it is your individual, however do not show SS# in abstract. Keep it only for your records. 5. Question: Family sells farm to 2 sons on contract as tenants in common. 2 sons decide to partition interests between each other so that son A owns the N½ and son B owns the S½. Deed in fulfillment of contract goes to son A and his wife as joint tenants as to the N½ and another Deed in fulfillment of contract goes to son B and his wife as joint tenants as to the S½. My question is, how is title held as to the N½ and as to the S½? Answer: Deeds in fulfillment of contract can go to sons and their wives as they choose, however they must deed between each other the part that they are not going to own. 6. Comments: I am doing a lien search on Jane Doe. There is a judgment entered against her in a Small Claims Action on July 12, Subsequent to the date the judgment is entered, a motion to stay proceedings is filed on May 2, 1991, notifying the court that a voluntary petition in Bankruptcy has been filed in the United States Bankruptcy Court. An order by the Magistrate Judge is entered on May 2, 1991, staying this action. Question: Normally I would consider this a moot situation as more than 10 years have passed since the judgment was entered. However, does the bankruptcy notice extend this 10 year limit so that we would have to show the judgment in our abstract prepared in 2006? It seems as though once the bankruptcy attorney gets the stay, they never follow up and let our Magistrate know the determination made by the Bankruptcy Referee so that the Small Claim can be permanently dismissed in our County. If I were doing a personal lien search on Jane Doe, not involving any property, I would search for 20 years and show the judgment and that the bankruptcy proceedings were also filed? Answer: The stay does not stop the calendar, the clock still runs. The stay is with regard to any other action in the court file to collect the judgment. The Magistrate is not staying the judgment; he is staying any action to collect. The lien created by the judgment lasts for 10 years. Personal Lien Search (10 years when real estate listed) (20 years when real estate not involved) 7. Question: We are doing a search on a Trust do we search just the Trustee or do we search everyone involved in the Trust, such as those who will benefit from the Trust? Answer: Some companies search the Trust and the trustee. If the deed only goes to the trust, you would not know who the trustee is. Most important to search the trustee.

3 8. Question: Ran across an unusual situation, two single individuals held title in the real estate as joint tenants. They failed to make their mortgage payments and were foreclosed on. The equity action was entered in Lis Pendens and the mortgage was foreclosed no right of redemption. BUT before the sheriff's deed was filed, one of the foreclosed individuals got married. What interest, if any, does the spouse have in the real estate? Thank you in advance for your thoughts. Answer: Spouse has no interest. 9. Question: Please explain the centralized tax lien information. Does that mean we have to check the website provided from now on?? Or do we still limit our search to our county? Answer: Your certificate only applies to a search of the county records. Search your county, just as before. 10. Question: In typing up an Affidavit of Adverse Possession, is it necessary to put the Power of Attorney and the Recorder's Certificate? I don't find this Affidavit mentioned in the Blue Book. Answer: As an abstracter, set out what is recorded. He also refers you to Iowa Code Section through the rest of the chapter. Sample shown below: AFFIDAVIT OF POSSESSION - Usually seen with use of a BAR form (Show heading) AFFIANT STATES: That is now the record titleholder of the following described real estate, situated in County, Iowa, to-wit: That said is now in complete, actual and sole possession of all of said real estate except as may be herein stated, and that he and his predecessors (who held record title thereof) in the recorded chain of title under which they claimed and claim ownership and the right to possession of the said real estate have been, since prior to January l, l970, in continuous, actual, visible, open, notorious, exclusive and unquestioned possession thereof, under color of title and claim of right to the exclusive possession as against the world and have improved said property and paid the taxes thereon; that neither the title nor the right to possession of said titleholders or any of those under whom they claim have been disputed or openly attacked by any one. That this affidavit is made from the personal knowledge of the undersigned who is familiar with the said real estate, its titleholders and its parties in possession; and is for the purpose of confirming title to the above described real estate under the provisions of Section 6l4.l7, Code of Iowa, and other statutes relative thereto. and, owners in possession of said property as above stated, hereby direct that this affidavit be filed of record and hereby appoint the County Recorder of the County wherein said land is situated as the authorized attorney in fact to file same.

4 Marginal Entry endorsed hereon by County Recorder in statutory form. 11. Question: Dan Smith has a deferred judgment that shows up in the ICIS Case Search as of 4/25/2005. When searching the ICIS Judgment/Lien Search nothing shows up. We are doing a personal lien search? Is this something we should show or is it to be considered pending? The deferred judgment is dealing with an OWI 1 st. If he keeps his nose clean, evidently it will be removed from the record after a year. If he does something wrong in the mean time will it become an active judgment retroactive to 4/25/2005? Please explain deferred judgments. Answer: A deferred judgment is the same as a pending matter. If the boy messes up, the Judge will revoke the deferred judgment and enter a regular judgment, however, it is not retroactive. It will be constructive notice the date the regular judgment is entered at the time the boy messes up a 2 nd time. 12. Question: We have a Farm Lease which is from March 1, 1985 to February 28, The lease contains a paragraph stating: TERMINATION OF LEASE. This lease shall be continued for the lease term herein provided, except as it may be terminated by default of Tenant. Further, such lease shall continue after such agreed term from year to year, upon the same terms and conditions, unless either party gives due timely and legal written notice to the other of election to cancel or terminate any such extended lease period whereupon the tenancy shall terminate March 1, following; Would you show this lease in a abstract after 3/1/2006? Answer: Nov/Dec 1995 Excerpt Regarding page 79 of the Blue Book, comment No. 4 as it relates to farm leases with a possession date of more than 20 years past. The comment states that such leases may be omitted based upon Article 1, Section 24, Constitution of the State of Iowa. Attorneys are objecting to this omission with an argument that the constitutional provision applies to leases with an initial term of 20 years and not to leases for one year which leases may be automatically renewed year to year for over 20 years. Please comment ANSWER: This comment has been in the Blue Book dating back to at last Page 110 of the 1987 Edition of the Blue Book has the same comment note the proviso if no renewals or extension of record. For a farm lease which had a possession date of say March 1, 1991, for one year, the original lease has expired, and the abstract showing of it does not show whether the lease is still in force because no notice to terminate was ever served. This is where rights of parties in possession come into play, and a buyer (or new lessee) of farmland should inquire, if someone is in possession or appears to be farming the land as to what that person s rights are.

5 13. Question: We have been noticing a difference on ICIS, the file date of a document and the created date are different dates, so that means that our documents are being file stamped and not entered on ICIS till later date. My question would be, is anyone making a statement in their certification regarding all documents available at the date of the search???, What do you do about documents that are file stamped in the clerks office and not entered into ICIS till later, Thanks Answer: This is a classic case of constructive notice. This is similar to a question on Nov/Dec That question read When does an Order entered in a District Court action become effective, at the entered date or filing date? If the dates are different, should both be shown on the abstract? The answer given was to show both dates. It is effective between the two parties at time of Decree. Third parties at time it is entered. 14. Question: If a member keeps their abstracts on computer and also does regular backups do they need to keep hard copies (paper) also? Thought perhaps this was an abstracting standard? Answer: One of the provisions in the Title Guaranty Program is that the abstracter must keep a copy of his abstracts. I would think if it was saved on the hard drive or backed up it should be ok if it can be reproduced. Comment: This would be office policy. In our office, we have the capability and office space to have the luxury of both computer abstracts, regular tape backups and hard paper copies as well. Personally, I feel much more comfortable with this. I also keep a backup tape off the premises as added security and peace of mind. You might check your own insurance policy and see what they might require. 15. Comments: Last week the Iowa Supreme Court decided Sieh vs. Sieh (No. 06/ Filed March 17, 2006) where the Court ruled that the assets of revocable inter vivos trust created by decedent before the marriage is property subject to the surviving spouse's statutory share under Iowa Code section Thus the surviving widow of the Grantor had the right to select 1/3 of the real property even though the land was put in the trust before the marriage. The Court also held that Iowa Code (3)(d) (which limits actions against the trust following death to the later of 60 days after notice is published or 30 days after notice of the trust is mailed) does not bar the surviving spouse from elective against the will (and taking her 1/3 of the real estate). It appears that the surviving spouse has the statutory time to elect against the will after the will is admitted to probate, which could be up to 5 years after death. Question: What showing needs to be made in an abstract after the death of the settler/trustee regarding the rights of a surviving spouse if no estate is opened or if the will is only filed or admitted to probate without administration so that a buyer can be confident the trustee has authority to sell? Will the trustee's affidavit be accepted? Some how I do not think it will be.

6 Answer: This is a legal question and the abstracter just needs to show everything of record and let the attorney decide if it is sufficient. 16. Question: With the Iowa Courts Online I question whether or not the statute with regard to Lis Pendens is being properly met. I would appreciate your comments. Answer: Someday this will have to be litigated. We don t think anyone can give you a definitive or authoritative answer. 17. Question: I feel uncomfortable with all the new Federal Tax Liens. See my examples. Some of their new forms have "deduction elected under section 2067 as calculated under section 2057(f)(2)". Is this a lien against the individual listed, the real estate listed or both? Answer: With this particular form, show as to specific property listed. 18. Question: What do you show when there is a notice of federal tax lien filed on Jan. 16, 2006 for $165, On March 16, 2006, there is a withdrawal of filed notice of federal tax lien. The same dollar amount is shown. I feel that I should show both? Your comments. Answer: We might show both or neither. Read the withdrawal carefully and see what it actually does. Gary had one of these a few years ago and showed both the original tax lien and the withdrawal because of the peculiar language in the withdrawal. 19. Question: What does it mean when Iowa Courts Online shows a judgment/lien as "Rectified Set Aside"? I talked to my Clerk and she has no idea? Answer: You need to look at the file. Show the lien and show the wording that it has been rectified, set aside. Perhaps the Clerk made an error and this is how that error is corrected. 20. Question: Contract shown. Escrow filed, modifications filed. Deed also filed. All show up in the same continuation. What should be shown? Answer: Some abstracters would show all documents, some would not, depending on effect on title. Our next meeting will be tentatively scheduled for next September/October to prepare for our respective presentations during regionals. Respectfully submitted, Lynette Thompson, Secretary

7 MEMBERS OF ABSTRACTING STANDARDS COMMITTEE 2006 KEVIN CHRISTIE Ida County Abstract Co. 217 Main Street Ida Grove, IA Phone: (712) Cell: (712) Fax: (712) Ida Co. NW Region MARY DAWKINS Boone County Abstract Company th Street Phone: (515) Fax: (515) Boone Co. SC Region boonecoabstract@opencominc.com DAVE ERICKSON (Attorney) Davis, Brown, Koehn, Shors & Roberts, PC 666 Walnut Street, Suite 2500 Des Moines, IA Phone: (515) Fax: (515) Polk Co. - SC Region dave.erickson@lawiowa.com RITA HARMENING PEDERSEN Mumma & Pedersen 114 S. Wilson Street Jefferson, IA Phone: (515) Fax: (515) Greene Co. SW Region ritaplaw@netins.net BRENT HARSTAD (Attorney) Abstract & Title Services, Inc. 503 West Main, Box 26 Anamosa, IA OR 151 Marion Blvd. Marion, IA Phone: (319) or Fax: (319) or NE Region brentharstad@.yahoo.com DANIEL M. KADRLIK Hancock County Abstract Co. 130 East 8 th Street Garner, IA Phone: (641) Fax: (641) Hancock Co. NC Region dankadrlik@sswireless.net GREGORY LIEVENS (Attorney) Shepard, Gibson & Lievens PO Box 158 Allison, IA Phone: (319) Fax: (319) Toll Free (877) Butler Co. - NC Region sgllaw@netins.net MARK MALLICOAT Abstract & Title Guaranty Co. 326 Fifth Avenue, South Clinton, IA Phone: (563) Cell: (563) Fax: (563) Clinton Co. SE Region mmallicoat@abstractco.com MARCIA J. OLSON (Attorney) Black Hawk County Abstract 614 Sycamore Street Waterloo, IA Phone: (319) Fax: (319) Blackhawk Co. - NE Region mjolson@blackhawkabstract.com GARY REEDER Delaware County Abstract Co. 304 East Main Street Manchester, IA Phone: (563) Fax: (563) Delaware Co. NE Region dcabstract@iowatelecom.net greeder@rocketmail.com LYNETTE C. THOMPSON Rerick Abstract Company 150 S. Hayes Avenue PO Box 548 Primghar, IA Phone: (712) Fax: (712) O'Brien Co. NW Region rerickabstract@tcaexpress.net MATT WHITE (Attorney) Title Guaranty 200 E. Grand Ave., Suite 350 Des Moines, IA Phone: Fax: (515) matt.white@iowa.gov BEVERLY WILD (Attorney) Beverly Wild Abstracting 107 South 4 th Street Guthrie Center, IA Phone: (641) Fax: (641) Guthrie Co. SW Region wildlaw@netins.net