Pennsylvania Real Estate Practices
- Attorney Involvement
- Cancellation/Commitment Fee
- Certificate of Release (of Mortgage)
- Good Funds Requirements
- Joinder of Spouses
- Mortgage Tax
- Payment Customs
- Policy Countersignatures
- Real Estate Taxes
- Search and Examination Fees
- Search Requirements
- Security Instruments (Deed of Trust vs. Mortgage)
- Standard Exceptions and Requirements
- State-specific Policy Variations
- Title Insurance Form and Filing Regulations
- Transfer Taxes
- Withholding Taxes
- Witness Requirements
Please describe any requirements under applicable state law for attorney, abstractor or other special professional involvement, for example, in the search, examination, opinion of title, signing, closing, disbursement, recording, preparation of documents, and/or policy-issuance.
None required. Title agents may prepare all documents to be insured. However, only attorneys may explain settlement documents.
Does your state permit or require a cancellation fee or commitment fee upon cancellation?
Yes, 3.1 of the Pennsylvania Rate Manual provides that a minimum charge of $100.00 must be made for cancellation.
Certificate of Release (of Mortgage)
If anyone other than the lender (such as a title agent, settlement agent, underwriter or attorney) has the authority to release the security instrument, please describe.
Pursuant to the "Mortgage Satisfaction Act" (Act 197 of 2002 - effective 2/7/03) Settlement Officer who is a licensed title agent, employee of an underwriter or Pennsylvania licensed attorney who conducted closing or directly supervised closing through which Mortgage was paid off may satisfy.
Please describe the kinds of deeds that are customary for commercial and residential transactions. Please describe the kinds of deeds that are generally not insurable.
Special Warranty Deeds are customary. Quit Claim Deeds are generally not insurable. We suggest that a "Warrantless, Conveyance Deed" be used instead of a Quit Claim Deed.
Good Funds Requirements
Is there a good funds requirement in your state?
Joinder of Spouses
If a non-title holding spouse is required to join in the execution of a deed or a security instrument, please describe. Any analogous rights, such as those in a civil union or equivalent, should also be addressed.
PA is an equitable distribution state which gives marital rights in property to non-title spouses in the event of a pending divorce. Non-titled spouses are required to join in the execution of a Deed or Mortgage if there is a pending divorce.
Is there a mortgage tax in your state? If yes, is it uniform across the state or does it vary? If it is uniform, please describe.
Who customarily pays for:
(a) Owner’s Policy? Purchaser
(b) Transfer Tax & Recording Fee? Transfer tax costs are split evenly between the parties. Recording fees are split as follows: purchaser for deed; seller for releases/satisfactions
(c) Survey Charges? Purchaser
(d) Closing/Settlement Fees? Purchaser; seller for municipal certificates
Please describe any statutory or regulatory requirements for countersignatures in order to issue the policy (for example, residency requirements).
Policies must be signed by a licensed, bonded agent or an officer of the underwriter.
Real Estate Taxes
Please describe the general tax year, due dates, and delinquency dates, including lien dates and payment cycle.
a) Tax Year - Local: Calendar; County: Calendar; School: Fiscal (July 1 through June 30) except for school districts of the first class, which are calendar year.
b) Due Dates - County and Local taxes or Philadelphia, Pittsburgh and Scranton City taxes--By April 31 of the taxing year; October 31 of the taxing year for School Districts other than Philadelphia, after which time the taxes are considered delinquent and an automatic lien dating as the first day of the taxing year.
c) Lien Date: If not paid, taxes become a lien against the property as of the first day of the taxing year.
d) Lien Duration: Once filed, the lien endures until paid or 20 years from the date of filing the claim, if not revived within that time for an additional 20 year period.
Search and Examination Fees
Is it permissible and/or customary to charge a separate search and/or examination fee, and under what circumstances? If your jurisdiction is all-inclusive, please state that.
Pennsylvania is an all-inclusive state. However, Section 2.3 of the Pennsylvania Rate Manual allows a separate search and/or examination fee "in specially difficult title matters". Those matters would include "multiple chains of title, land under water, coal, oil, gas or mineral searches, railroad property searches, land in beds of streets, rights-of-way, driveways, foreclosures, tax sales, proceedings under federal bankruptcy or state insolvency related statutes, or … other unusual difficulties or unusual expenditures".
Is there a minimum period of time for a title search required: (a) by state law, (b) pursuant to marketable record title acts, or (c) by any other applicable title examination standards (e.g., state bar association)? Please respond to each category. If a minimum search period exists for any category, please state it.
No state law imposes a minimum period nor does the state have any marketable title acts, however, the standard search period for a purchase transaction where there is no back title evidence is 60 years.
Security Instruments (Deed of Trust vs. Mortgage)
Please describe the customary and permissible form(s) of security instruments used in your state.
Who can be listed as the trustee on the Deed of Trust (e.g., residency and/or natural person requirements, etc.)? Can an underwriter or title agent be designated as the trustee, and, if so, is it customary?
Standard Exceptions and Requirements
Please identify the standard exceptions and requirements that are customarily used in your state.
1. Defects, liens, encumbrances, adverse claims or other matters, if any, created, first appearing in the public record or attaching subsequent to the effective date hereof but prior to the date the proposed insured acquires for value of record the estate or interest or mortgage thereon covered by the commitment.
2. Discrepancies or conflicts in boundary lines, easements, encroachments, or area content which a satisfactory survey would disclose.
3. Any lien, or right to a lien for services, labor or materials heretofore or hereafter furnished, imposed by law and not shown by public records.
4. Rights or claims of parties in possession or under agreements of sale not shown by public records.
5. Taxes or special assessments which are not shown on the public record.
6. Possible additional tax assessments for new construction and or major improvements.
7. Any reservation, restriction, limitations, conditions or agreements set forth in the instrument by which title is vested in the insured.
8. Subject to all coal and mining rights and all rights relating thereto: THIS DOCUMENT DOES NOT INCLUDE OR INSURE THE TITLE TO THE COAL AND THE RIGHT OF SUPPORT UNDERNEATH THE SURFACE OF THE LAND DESCRIBED OR REFERRED TO HEREIN AND THE OWNER OR OWNERS OF SUCH COAL MAY HAVE THE COMPLETE AND LEGAL RIGHT TO REMOVE ALL SUCH COAL AND, IN THAT CONNECTION, DAMAGE MAY RESULT TO THE SURFACE OF THE LAND AND ANY HOUSE, BUILDING OR OTHER STRUCTURE ON OR IN SUCH LAND. THE INCLUSION OF THIS NOTICE DOES NOT ENLARGE, RESTRICT OR MODIFY ANY LEGAL RIGHTS OR ESTATES OTHERWISE CREATED, TRANSFERRED, EXCEPTED OR RESERVED BY THIS INSTRUMENT. Policy does not insure against subsidence.
9. Excepting and reserving that portion of the premises lying in and along the roadbed(s); subject to public and private rights thereon.
10. Company assumes no liability for the possible designation of the premises insured hereunder as a Wetlands Area by any governmental agency.
11. Subject to any line rights of way including electric line, telephone line, cable line, water and sewer line rights of way in use and existing in, on, or under the ground and all rights in relation thereto.
12. Amount and computation of area or acreage is not insured.
13. Any lease, grant, exception or reservation of oil or gas rights, storage rights, or minerals or mineral rights appearing in the Public Records.
State-specific Policy Variations
If there are state-specific changes to the provisions in the ALTA policies (e.g., Arbitration, Minerals), please describe.
PA policies are a modified version of the 2006 ALTA policies; PA has omitted survey coverage from the policy and requires such coverage to be purchased by endorsement.
Title Insurance Form and Filing Regulations
Please describe the form and/or rate filing requirements, if any, related to policies and endorsements. Please describe any applicable rating bureau.
All forms, and all rates, up to 30 million dollars are handled through the Title Insurance Rating Bureau of Pennsylvania. Please see the Pennsylvania Manual of Rules and Rates available in our PA Business Practices/Real Estate Practices Section.
Is there a transfer tax in your state? If yes, is it uniform across the state or does it vary? If it is uniform, please describe.
Yes, the State Transfer Tax is always 1% of the sales price. In addition, there is a Local Transfer Tax which varies from 1% to 4% of the sales price based upon the location.
Is usury coverage available?
Usury coverage is not available in Pennsylvania.
What are your state’s requirements, if any, with regard to withholding proceeds from a sale, similar to but not including FIRPTA?
There are no state requirements regarding the withholding of proceeds from a sale.
Are witnesses required on a deed or security instrument? If so, please describe.
a) Witness on Deed and Mortgage by individuals not required
b) Attestation by corporate officer on Deed and Mortgage by corporation is not necessary; corporate seal is not required. See 15 Pa.C.S.A. §1506(b).