I read an interesting post recently involving drugs and the sale of an ordinary single-family home. The Buyer’s title company had a very, very unusual requirement. They insisted that the closing attorney include in the Affidavit of Title language concerning illegal drug use and activity on the property. They are concerned about federal seizure of real estate for violation of federal drug laws.
The seller is not obligated to cooperate with the buyer’s title insurance company if the title insurance commitment imposes an unreasonable condition. The client is only obligated to convey “marketable title” i.e., title insurable at regular rates. My impulsive reaction was to tell the buyer’s attorney to use another title insurance company ready to issue the title commitment without the marijuana-related language requirement in the Affidavit of Title. If the face of losing business, many title companies will back off and delete the condition, unless there is something factually about the seller (i.e., some indication that someone was actually dealing marijuana out of the house). Otherwise, I see no reason to include such a clause in the Affidavit of Title.
Think about it… will any seller who has produced drugs in the house or distributed drugs from the house going to read this language in the affidavit and say “hold it”, I did manufacture pot in the house and I’m uncomfortable signing this. I don’t think so.
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By Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a Freehold Township, Monmouth County NJ Real Estate Attorney