Wisconsin Eagle's Nest: Q3 2024

EAGLE’S NEST A WISCONSIN AGENCY NEWSLETTER

Q3 2024 © 2024 First American Financial Corporation and/or its affiliates.

All rights reserved. First American Title Insurance Company makes no express or implied warranty respecting the information presented and assumes no responsibility for errors or omissions. First American, the eagle logo, firstam.com, and First American Title are registered trademarks or trademarks of First American Financial Corporation and/or its affiliates.

Table of Contents Wisconsin Contact List

3

Scams, Frauds and all that Jazz

4

Trusts: Easier than you think.

5

Cancellation and Mutual Release

6

ALTA 41 Water Endorsement

7

Product Highlights

8

Upcoming Webinars & New Rates

9

Q3 2024 | PAGE 3

Wisconsin Contact List Put your trust in the professionals that put you first. Meet the key players who are committed to providing the necessary resources and underwriting guidance you need, and the service solutions that give you an edge.

Product, Service, and Administrative Support

Don Kennedy

Ben Smaglick

Division Managing Director

Agency Representative

714.788.4908 dokennedy@firstam.com

608.345.3902 bsmaglick@firstam.com

Underwriting Support

Marv Ripp

Steve Zablocki

VP, State Counsel

Senior Underwriting Counsel

608.286.3202 mripp@firstam.com

Allison Kalweit Underwriting Counsel

608.286.3224 szablocki@firstam.com

Julie Angelakos Regional Underwriting Director

608.346.5135 akalweit@firstam.com

630.799.7123 jangelakos@firstam.com

Agent Underwriting Divisional Leadership

Len Prescott, Esq.

Randy Paslay

VP, Director of Agency Underwriting 305.908.6252 305.900.8427

VP, Divisional Underwriting 714.250.8607 951.529.4664

PAGE 4 | EAGLE’S NEST

Scams, Frauds and all that Jazz Steve Zablocki, Senior Underwriting Counsel

Stay vigilant. Scammers and rip-off artists are out there trying to hone their tradecraft. Watch for situations where things “don’t feel right”. Watch for deals that feel peculiar. Is the Seller getting upset because you are offering to overnight documents to their home address? Is the Seller giving you an out-ofstate address? Is there some excuse or comment that just feels out of sorts?

Is the Seller demanding things proceed quickly? Why? What’s the rush? If their demands don’t feel genuine, slow things down and press them on their demands.

Engage the Seller and ask them about the property. Get an idea of what they know.

Most scammers aren’t going to be able to tell you much about the property or any other information about our state. Again, slow things down.

If the customer gets upset, let them know you are doing your due diligence. You are trying to safeguard the deal. A frustrated scammer may get upset and try to apply pressure. Stand firm unless and until you get comfortable. Much better to keep asking questions until satisfied that to have to fight a bank trying to cancel or claw back a wire. A truly genuine Buyer or Seller will never get upset if you tell them you are protecting their interests and the deal.

Again, take a step back. If you feel that your deal might be suspect, give your First American underwriter a call. See what we think. Get a second opinion. We are here to support you and to help prevent fraud.

PAGE 5 | EAGLE’S NEST

Trusts: Easier than you think.

Steve Zablocki, Senior Underwriting Counsel Almost daily, we receive questions on trusts.

We are asked who can sign? What about this sub-trust? Who gets the money? Well, we are here to tell you, that in most deals, trusts are easy.

First, who can sign? Is there a full copy of the trust? If we can see it, great. We can see who is supposed to be trustee. Is the grantor deceased? Can we tell who can act? Are there co-trustees that must act together? One thing to remember is that it is unlikely a successor trustee can delegate or use a power of attorney. The trust will have to provide for it.

What if they don’t want you to see the trust?

Don’t be insulted. The whole purpose of a trust is to keep things private. As a result, some people don’t want prying eyes seeing their

What about situations where there are subtrusts? A parent trust can spin off or create subtrusts for the benefit of beneficiaries. To be blunt, it isn’t something we are concerned about.

Unless the subject property is conveyed by deed to that sub-trust, that sub-trust’s existence is probably only in existence as a conduit for passing money to a beneficiary. We are only concerned about the vested trust. Again, with a certificate of trust in hand reciting the trustee and their powers, we can close the deal. The rest is just noise.

trust.

We can get around that by having the Trustee sign a trust certificate.¹ The trust certificate, among other requirements, must be signed and notarized and must recite that the trust hasn’t been revoked, modified or amended in any manner that would cause the certificate to be incorrect.² Finally, and best of all for us, is that if someone acts in reliance on a certification trust without knowledge that any representation is incorrect is not liable.³ Meaning that, if you close a deal relying on a trust certificate and it is later found to be wrong, the beneficiaries cannot sue you or the title insurer.

Can you pay a settlor instead of the trust? It may be a situation where a settlor insists that they do not have a trust bank account. It might be something you permit if the settlor (The creator of the trust) gives you written instructions.

However, if the settlor is deceased and there’s an acting successor trustee, there’s little to no leeway. You have to pay the trust.

Whatever the case, trust us, trusts are easy. If you aren’t sure who can act, request a trust certificate. With that, you can easily and confidently close your deal. With any of your trust questions, give your First American underwriter a call.

-----------------------------------¹ Wis. Stat. §701.1013 ² Wis. Stat. §701.1013(2-3) ³ Wis. Stat. §701.1013(6)

PAGE 6 | EAGLE’S NEST

Cancellation and Mutual Release Steve Zablocki, Senior Underwriting Counsel

Your deal died. Buyer disappeared or balked

What if the old buyer can’t be found? It may be

at closing.

You never received a signed

that we require the realtor to go out to the

cancellation and mutual release (“CAMR”).

buyer’s home. Did anyone call them? What steps

Good news, seller now found a new buyer. Bad

were taken to reach the buyer? What are the

news, buyer is nowhere to be found to sign the

facts? We want to get a CAMR to put ourselves

CAMR. Whatever the case might be, you are

at ease.

now stuck with having to pick up the pieces.

Yet what happens if we can’t? Sounds like it is Why do we need the CAMR? Quite simply

time to call your First American underwriter. Will

because we know that there was a prior buyer.

we insure over the issue? Will we require

We know there was someone who intended to

additional steps? It is going to depend. It is one

purchase the property. They might have an

of those issues that require us to look very

interest. We have knowledge that someone

closely at all the facts. Ultimately, our goal is to

else might claim a right. We need to get a

get your deal number two working. However, we

document that cancels the previous transaction

won’t blindly proceed. Whatever the case, call

and releases the buyer and seller from any

us.

further relationship. We need something that recognizes that buyer no longer has any rights related to the property.

PAGE 7 | EAGLE’S NEST

Groundwater and the ALTA 41 Water Endorsement Steve Zablocki, Senior Underwriting Counsel The rule was stated that a possessor of land or his grantee who withdraws ground water from the land and uses it for a beneficial purpose is not subject to liability for interference with the use of water by another, unless the withdrawal of water causes unreasonable harm through lowering the water table or reducing artesian pressure, the ground water forms an underground stream … , or the withdrawal of water has a direct and substantial effect upon the water of a watercourse or lake…”⁵

We all need water. It irrigates our crops and ultimately keeps us alive. For Wisconsin, it is everywhere. It is estimated that there are over 1.2 million billion gallons of water underground.¹ With all that water, the state has no history of permitting anyone to have a separate right or claim interests to ground water. Consequently, water rights, unlike minerals, are not a severable real estate interest in Wisconsin.

It isn’t the same in other states. So much so, that other states permit the severance of ground water from the fee landowner interest.

Examiners in those states need to determine whether the land conveyance contains ground water rights or if it belongs to another. For us, it’s not an issue. Rather, it is much simpler.

Wisconsin defines groundwater as any of the waters of the state … occurring in a saturated subsurface geological formation of rock or soil.² Historically, a landowner could consume groundwater on their property “with impunity”.³ This right was later curtailed to limit water use so long as it does not cause unreasonable harm to another.⁴

Beyond the standard recited, every well must conform to Wisconsin Department of Natural Resources’ standards. Permitting is required for high-capacity wells, wells that pump more than 100,000 gallons per day.⁶ Why does this all matter? It matters when we are asked to issue ALTA 41 Water Series endorsement.

This endorsement functions similarly to the ALTA 35 series but instead of mineral rights, the interest deals with water rights. That is, it insures against loss or damage resulting from enforced removal or alteration of certain surface improvements due to the exercise by a water right estate owner of the right to use the surface of the land to extract water.

Since Wisconsin does not recognize a separate interest for water, issuance of the endorsement is likely something we can easily accommodate. On the other hand, if you do see someone recording a claim for water rights in the chain of title, contact underwriting. We’d want to analyze and understand the basis for the stated claim.

-----------------------------------¹ Wisconsin Water Facts, Wisconsin Water Library, University of Wisconsin - Madison https://waterlibrary.aqua.wisc.edu/water-facts/ ² Wis. Stat. §160.01(4) ³ Huber v. Merkel, 117 Wis. 355, 94 N.W.2d 354 (1903) ⁴ State v. Michels Pipeline Const, Inc., 63 Wis. 2d 278, 217 N.W.2d 339 (1974) ⁵ State v. Michels, 63 Wis. 2d at 303 ⁶ Wis. Stat. §281.34

PAGE 8 | EAGLE’S NEST

Product Highlights

discownts.com

Clear2Go® - What’s New?

Take advantage of discownts.com and enjoy savings from suppliers!

The updated Clear2Go® Reports will be live on August 5th.

Download Flyer

Download Flyer

Better, Faster, Customized Content at Your Fingertips Discover the power of AgentNet® Knowledge, a revolutionary online platform that delivers a wealth of guidance and resources—all in one place. AgentNet Knowledge brings together the full power of underwriting content in a dynamic, interactive tool that adapts to your needs and preferences.

Download Flyer

PAGE 9 | EAGLE’S NEST

Upcoming Webinars SAVE THE DATES

➢ 1031 Exchange September 4th, 2024 | 9:00am – 10:00am CST

➢ Divorce and Probate October 9th, 2024 | 9:00am – 10:00am CST

➢ Eagle Policies for Owners November 6th, 2024 | 9:00am – 10:00am CST

➢ Residential Endorsements December 4th, 2024 | 9:00am – 10:00am CST To review previous webinar recordings, visit AgentNet® Knowledge

REMINDER: New Rates WISCONSIN RATES EFFECTIVE JULY 10, 2024 Resources Available on AgentNet® Knowledge under Manuals Tab: Wisconsin Rate Manual - July 10, 2024 Wisconsin Rate Manual Changes Overview - July 10, 2024 Wisconsin Title Policy Rate Schedule - July 10, 2024 Wisconsin High Liability Title Policy Rate Chart – July 10, 2024 New Rates are available within both AgentNet® and First American’s Comprehensive Calculator (FACC).

The First American Comprehensive Calculator (FACC) can be accessed at facc.firstam.com to confirm and apply accurate rates. © 2024 First American Financial Corporation and/or its affiliates.

All rights reserved. First American Title Insurance Company makes no express or implied warranty respecting the information presented and assumes no responsibility for errors or omissions. First American, the eagle logo, firstam.com, and First American Title are registered trademarks or trademarks of First American Financial Corporation and/or its affiliates.

© 2024 First American Financial Corporation and/or its affiliates.

All rights reserved. First American Title Insurance Company makes no express or implied warranty respecting the information presented and assumes no responsibility for errors or omissions. First American, the eagle logo, firstam.com, and First American Title are registered trademarks or trademarks of First American Financial Corporation and/or its affiliates.