Charles Jones' Blog


...to interrupt the normal course or unity of: - Merriam-Webster.

The idea of having the business you own, work for, or manage in the cross hairs of a disruption can cause anxiety. What is standard or cutting-edge today can quickly become obsolete tomorrow.

An article in Forbes suggests a new approach to dealing with disruption: “… all companies -- Fortune 250 or not -- should be figuring out how to become the kind of company that disrupts the market. “In other words, the message shouldn’t be ‘how to avoid becoming Blockbuster’, it should be ‘how to become Netflix’”[1].

Easier said than done, right?

A 2018 post on Wired (in partnership with Accenture) provides some insight as to how. The post suggests that new research “…shows that more businesses need to be more confident with change. Understanding the predictable patterns of disruption will help achieve that. With this foresight at the centre of future strategy, companies can start to lead change, instead of following it."[2].

Disruption is just another word for change. We have all been through it, and it can be uncomfortable. But refusing to change can lead to more disruption for you and for your business. The truth is we have been here before, as has our industry, and our country.

Consider how you used to order due diligence searches before the Internet or title software. How did this change the way you did business? How was your staff impacted? Did responsibilities change?

Think back in history to the industrial age that took place from mid 1770’s to around 1900. Through automation and machinery, the status quo was not just disrupted, but in many cases wholly replaced. But thanks to American ingenuity, these changes also created other, new jobs.

Any period of change or disruption requires an equal period of adjustment, uncertainty and yes, anxiety. It can be scary.

What are you doing today in your business to be prepared for such a disruption? At Charles Jones, we are positioning ourselves for the inevitable change by rethinking the settlement process and how to complete orders faster without sacrificing accuracy.

What about you?

 

 


Joe O'Gorman
Senior Product Manager

 

 

 

 

 

 

 

[1] Why It's Important To Make Your Company The Disruptor, Not The Disrupted, 6/4/2018.

https://www.forbes.com/sites/forbestechcouncil/2018/06/04/why-its-important-to-make-your-company-the-disruptor-not-the-disrupted/#25e83cb731a6

[2] The future of all industry is disruption – and that’s a good thing.

https://www.wired.co.uk/article/the-future-of-all-industry-is-disruption-and-thats-a-good-thing


New Jersey municipal taxes aren’t as simple as they may initially seem. They are nuanced and can contain hidden pitfalls that may impact your real estate closing. They can lead to deficient escrow funds, redemption issues, missed liens/registration fees or issues with private agreements between sellers and municipalities. The first step to understanding tax issues that may negatively impact your closing is to educate yourself and your team on how to identify and address them. No one likes surprises at the closing table and/or after escrow has been settled. This article hopes to provide a baseline understanding so you can avoid some of the potential landmines that exist in the NJ real estate tax world.

6% Year-End Penalty:

While it is only relevant at the very end of the year, the 6% Year-End Penalty could be felt in January and influence the amount due to a municipality for a simple tax delinquency or a lien redemption. This is how it would play out: a settlement agent receives a redemption amount from a municipality calculated to December 28th, the date of the scheduled closing. The funds are immediately mailed but, the municipality does not receive them until January 2nd. The settlement agent is notified that the redemption is deficient because of the additional 6% year-end-penalty because the redemption was received after the end of the year. The municipality is within its rights to demand payment even though this year-end penalty was not actually due on December 28th. Some New Jersey municipalities have a year-end penalty which isn’t due until the first day of the New Year given certain requirements, which include:

  • There must be delinquency for over $10K, which is only for a single year (the delinquency cannot spread over more than one year).
  • In some instances, a third-party lienholder may be entitled to the 6% year-end penalty if they meet the eligibility guidelines. If this lienholder pays in excess of $10k for delinquencies, they are then eligible to collect this year-end penalty.

Some Municipalities must calculate their redemption worksheets to their Governing Body meeting dates or another date (with a valid reason) of which the settlement agent is unaware. It is recommended you contact the municipality and confirm no Governing Body approval is required for the redemption.

Vacant Property Registration:

The Vacant Property Registration fees continue to be a challenge for title professionals in New Jersey. While there is no statutory allowance that provides for these registration fees to become a lien, they have become an issue at closing for some Settlement Agents. Keith Bonchi, Esquire, Legal Counsel for the Tax Collector’s and Treasurers Association of New Jersey, maintains that Vacant Property Registration fees are not a lienable charge (Visit https://www.charlesjones.com/blog/ uploads/2017/09/K-Bonchi-vacantprop-reg-fees-for-TCTANJ.pdf to view his legal opinion). They are, however, treated like landlord registration fees or other non-lienable charges a municipality could levy but not include in a tax sale. Most tax information providers continue to report these same vacant property registration fees on searches, when made available.

 

Vacant Property Maintenance and Cut/Clean Fees:

While the Vacant Property Maintenance and Cut/Clean Fees title is like the Vacant Property Registration fees noted above, they are handled differently in the Tax Collection process. These are lienable charges in New Jersey and are covered by various State statutes.

P.I.L.O.T.:

Payments in lieu of taxes (P.I.L.O.T.) are inherently unique by design. They are a contractual agreement between the landowner/developer and the municipality. Billing and payment information is reported on your Tax Search. However, the title examiner should fully review the specific P.I.L.O.T. contract as part of their title examination to ascertain if it is still in place and whether it can be assigned to the new owner. Most underwriters have specific requirements and exceptions which are recommended when land is the subject of a P.I.L.O.T. contract.

Abatements:

Abatements are a reduction in an assessed value with a specific phase in time assigned to the parcel. Like P.I.L.O.T.’s, these are agreements/ contracts between the property owner and the municipality. While your Tax Search should indicate the existence and status of the abatement, these agreements/contracts should also be examined to ascertain duration and assignability to the new owner(s).

By understanding these issues, you will be in a better position to serve your customer and avoid related post-closing headaches. If you have a question, or concern about a municipal tax issue not covered by this article, please feel free to reach out to me and to then discuss with your underwriter.

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The above information is for informational purposes only and is not intended to provide legal advice.

By Cynthia A. McBride

Cynthia A. McBride, a New Jersey State Certified Tax Collector for over 30 years, employs a lifetime of tax collection expertise as the Government Relations Specialist for Charles Jones LLC. She also serves as Tax Collector for the City of Lambertville and has served as an Adjunct Professor for the Tax Collection Program at Rutgers Center for Government Services.

Article previous appeared in the Summer 2019 Issue of the New Jersey Land Title Association’s the Advocate.


How a Nineteenth Century Professional Conveyancer Took His Craft So Seriously, He Established a New Line of Insurance

If you are a title geek, you may know the name Joshua H. Morris. As the lore goes, he was part of a group of conveyancers who met in Philadelphia and formed the very first title insurance company. With that – he helped both to sow the seeds of the modern industry in which we work today and facilitate the growth of homeownership in the United States.

Joshua Husband Morris was born almost 200 years ago on September 12, 1822. He was the 2nd of 7 children and was born to Anthony P. and Anna (Husband) Morris (1850 US Census).

At the time of his birth, the United States had been in existence for less than 50 years. In his lifetime he lived through the Civil War, the assassination of two Presidents (Abraham Lincoln, James A. Garfield), reconstruction, and the invention of the telephone to name a few.

Born into the Quaker religion (US Quaker Meeting Records, 1681-1935), and what was considered a prominent family of the time, Joshua was educated at Haverford College (Biographical catalogue of the matriculated of Haverford College). The New York Times reported on July 5, 1853, that a Joshua H. Morris received a Degree of Bachelor of Laws from the University of Pennsylvania Law School. Given that the 1870 census described his occupation as a lawyer, the reference appears to have referred to him.

In 1847, he married Ann(a) M. Wistar (US Quaker Meetings). They appear to have had just one child, Elizabeth, who survived to adulthood. Fourteen years after they were married, Ann passed away, and Morris would later marry Elizabeth Stokes – with whom he would have two children (John and Anne). By the 1850 census, he and his father were both reporting their professions as that of a conveyancer. In 1865, Joshua served as a director for The Provident Life and Trust Company of Philadelphia (Philadelphia Inquirer, 11/15/1865).

However, things were about to change in the insurance business, and Joshua seemed poised for the transformation.

The impetus was the 1868 Pennsylvania Supreme Court case of Watson v Muirhead (57 Pa. 161 (1868), the case in which, “(Mark) Watson lost his investment in a real estate transaction as the result of a prior lien on the property. (Charles L.) Muirhead, a conveyancer, had discovered a lien prior to the sale but told Watson the title was clear after his lawyer had erroneously determined that the lien was not valid. The courts ruled the conveyancer was not liable for mistakes based on professional opinions.” (Philadelphia Fact: The Birthplace of Title Insurance, ALTA.org)

The court opinion reads in part, “The business of a conveyancer is one of great importance and responsibility. It requires an acquaintance with the general principles of the law of real property and a large amount of practical knowledge, which can only be derived from experience. The rule of liability for errors of judgment as applied to them ought to be the same as in the case of gentlemen in the practice of law or medicine. It is not mere art, but a science and like an attorney or a physician should not be held legally responsible should it be in error.” (Pennsylvania State Reports Containing Cases Decided by the Supreme Court of Pennsylvania, Vol 57, p. 161-168)

While the decision was reasonable, it left Mark Watson, and others like him, with no recourse from assuming broad liability exposure on their property investments. Both homeowners and those who lent them money had no protections available to them. Surely, this would prohibit many buyers from taking on the risk of purchasing a home or property. How could homeownership thrive?

A group of enterprising conveyancers in Philadelphia had an idea. Possibly realizing the importance of developing a set of standards to ensure the professionalism of their vocation continued, they formed an association. In 1870, we once again see the name Joshua H. Morris when he helped form the Philadelphia Conveyancers' Association. The January 28, 1870 issue of The Legal Gazette provided context to the new organization’s purpose: “Though Conveyancing … has for years past been slowly developing from the occasional employment of lawyers and the labor of scriveners, into a special profession or branch of legal practice, yet persons more or less unqualified have at time undertaken it, perceiving the absence of consolidation in its membership and no established standard of proficiency; and its property elevated rank has consequently failed to receive general recognition. To remedy these disadvantages, an association has at last been organized, comprised not only the few who may be said most fitting to represent the profession here, but also almost every competent conveyancer without exception, so long, and so decidedly, has the want of associative action been felt.”

It appears that conveyancing may have been a very lucrative profession. In the 1870 census, Joshua’s income and real estate valued $85,000 – adjusting for inflation, that would equate to more than $1.5 million.

In 1872, he was elected Treasurer of the new association. It was reported that at that meeting “a discussion ensued in regard to the practice of the profession. Attention was called to the dilapidated records in the various municipal offices. The question in regard to custom of the insurance companies protecting mortgagees and ground rent holders in holding policies of insurance as collateral for loans, was also discussed at length, but no action of a definite character was taken.” (Philadelphia Inquirer, 4/16/1872) However, in 1874, the push for further change arose when “…the Pennsylvania legislature passed an act allowing for the incorporation of title insurance companies.” (Wikipedia)

This led to the founding of “The Real Estate Title Insurance Company of Philadelphia” and Joshua’s role as its president. The company was described as one that “…insures purchasers of Real Estate and Mortgage against loss from defective title, liens and encumbrances.” Further, “It has at its command the knowledge and experience of most of the leading conveyancers of this city, as well as the information relating to real estate title accumulated by them during their years past. … Insurances are effected only after thorough examination of title, and search as to incumbrances(sic).” (Philadelphia Inquirer, 12/29/1876) Many of these “leading conveyancers” joined Joshua in this new venture. (Wikipedia).

In June of 1876, the company’s very first title insurance policy was issued to Joshua’s aunt, Martha (Times Herald, 1938). And, the rest, as they say, is history.

As for that conveyancing association, “According to the first edition of Ladner's Conveyancing in Pennsylvania [presumably a precursor to the widely used, Ladner Pennsylvania Real Estate Law], the ‘old time conveyancers’ had ‘practically disappeared (by 1875)’ due to the advent of title insurance companies.” (Wikipedia) Joshua died in 1885 at the age of 64. Upon his death, the Philadelphia Inquirer stated, “Mr. Morris… was a conveyancer and was highly respected in business circles.” (12/24/1885)

Joshua H. Morris – part of that special group of conveyancers, who, as the lore goes, met in Philadelphia and founded the first title insurance company. With that, they created an industry that continues to thrive today, with conveyancers, abstracters, and title producers all proudly protecting property owners so they can achieve the American dream of owning a home.

 

 

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By: Patrick T. Roe, General Manager, Charles Jones LLC

Research assistance by: Linda L. Martin, Marketing & Customer Experience Manager

A version of this article originally appeared in the Spring 2019 issue of the New Jersey Land Title Association’s Advocate.


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