Shaping the NYC Skyline

Welcome to Shaping the New York City Skyline, the podcast that explores the stories behind the buildings that shape our city. I'm your host, Brenda Slochowsky, and I'm here with my co host,
David Shamshovich.
Hey, guys.
Hey, Brenda. Hey, Camilla.
Welcome back to the studio.
And welcome back to another episode of Shaping the NYC Skyline with your amazing three attorney hosts from Seiden Schein. We're excited to introduce Zoy Balaskas who's Senior Vice President and Chief Underwriting Counsel at Commonwealth Land Title Insurance Company, and she was just lovely.
I really learned so much Yeah, so much.
I think this has been the episode that I've learned the most so far.
She talks about her experience, her background, how she got involved in title, how she got to law school in the first place. She graduated from NYU, got an LLM in International Law, worked a little bit in private practice for a bank and then went off into the title industry where she's been doing this for about 20 years. And as I say during the episode, and as I've told the audience probably previously and as well as both of you, when you're working on real estate transaction you need a person like Zoy, to help clear title and to really dig deep, what she calls title forensics.
As much as we knew about title and we know a lot about title, considering what we do, she taught us so much. The intricacies of what she does, looking at both the macro picture and the finer details to make sure that the transaction works, not just now, but for the future and what you're intending to do with your purchase. That's a huge deal. And having somebody who's as knowledgeable as Zoy on the deal is really a huge asset to you. One of the benefits of our podcast is really getting to know the people behind the deals who shape the New York City skyline.
Our Skyliners are going to totally dig Zoey's episode, and if you need any title help, please contact Commonwealth. They're amazing. Zoy's amazing. And you can do the same for us. We're on the cusp of lots of cool housing changes with 485-x, 467, and also the City of Yes. Also 421-a extension and other things that are coming up. If you have questions, contact us. We're happy to talk. And if anybody's interested in being on the show, let us know. We're always interested in meeting new people and having new guests. And please check us out on social media, follow us on LinkedIn, follow us on Instagram. We post teasers and other interesting information. And if you like the show, we'd love you to subscribe on YouTube, subscribe on Apple podcasts or any other place you get your podcast.
And we'd love a review that would get our message out to more audience members and really promote the show and ourselves. And our guests. Thank you very much Skyliners for supporting us and please keep doing that. Now without further ado, Zoy Balaskas from Commonwealth Title Insurance Company.
Take it to the top.
Hello Skyliners and hello, Brenda and Camilla. We have an amazing guest and one that I have wanted on the show for a while. She's the Senior Vice President, Chief Underwriting Counsel of Commonwealth Land Title, and before that served as senior underwriter at First American Title Insurance Company, for 13 and a half years. A Queens gal, born and bred, went to Flushing High School, Queens College, and then NYU. I want to introduce everybody to an amazing person. Someone who is smart and knows a lot about what she does. I know this from personal experience, Zoy Balaskas.
Thank you. And it's great to be here.
We're very excited and so appreciative for you joining us here. You were one of three girls, first generation American. Education for immigrant families. I know this because I come from an immigrant family, is very important and that seemed to be very important to you and your family, and that's what shaped you.
Very much so. My parents immigrated here from Greece. In 1969, 1970, about there. Though I found out that my mother had actually visited here earlier. I found a picture of her at the Queens Fair, 1964. So she was at the famous Queens Fair. So they immigrated here in 69 or 70, and we lived a few blocks from downtown Flushing. The funny thing is that my mother's entire town pretty much picked up and moved with them. So my whole block for the first 10 or 12 years was basically my mom's village, her town, in Flushing, New York. You could pretty much get by speaking no English. And when she came here to this country. She couldn't speak a word of English. She didn't have to. She was with people who just spoke Greek and they got by and eventually she taught herself the language. I didn't really have much direction as far as schooling other than the goal is to get as much schooling as possible. And I think the reason for that is because my mom, she grew up at a time and a place where you didn't have many options. So she remembers the second world war. She remembers other wars in her country, other civil wars. So she didn't have that opportunity. So I embraced that and all three of felt that it's almost like our obligation to become as educated as possible, but the direction just wasn't there. So when I say the direction wasn't there in my mother's time, you were either a priest, a farmer, a teacher or doctor, or if you're a woman, you could be an assistant to any of one of those things. But other than that, I didn't really know what I was doing. I liked school and I did very well in it, so I pursued academics to an extreme. I was valedictorian of my high school, which meant that when I graduated, I knew that I was going to go to Queens College because that's what kids of immigrants did. So I did that, and I was actually valedictorian at Queens College also. And from there on, I went to law school.
Did you work or have any opportunities, like internships during that period?
I was a tutor in my high school.
I could see that.
And I loved teaching. When I went to college, I actually stumbled on an LSAT prep class. I had a few majors. My primary major was philosophy. So I took a lot of logical reasoning classes. I loved math. I liked puzzles. I liked logical reasoning. So I really took to the test and I did very well. I ended up working for one of the test prep companies for seven years on the side. So in the summer or if my class workload was light I would teach and tutor. And I absolutely loved it. I taught every prep class except the MCAT because I didn't have the science background for the MCAT. And I learned a lot about the education process of getting through high school, college and graduate school. That whole process, it's so interesting. I took the actual class after I had taken a practice test. I had done well on it, but I wanted to understand why I did well. And it's funny, years later, when I started teaching, I had these two students come in who wanted private tutoring. They were both from Yale. They were best friends. And they were scoring in the one seventies. So they were in the 99th percentile. And I said to them, why are you taking tutoring? And they said to me something that made me realize what it is to be intelligent. They said to me, it's one thing to do well in the test, and it's another thing to understand why. I'm not sure that I can replicate this if I can't figure out what I'm doing right. That was a learning point for me that sometimes it's not enough to know how to do something, but to pull back and study how you're doing it takes it to a different level.
Also, once you reach that 170, every point is like a massive lift. And you had a choice, I assume, of law schools to go to, right? But you chose NYU. Is there a reason that that was your choice?
I applied to four schools. And this is one thing I noticed about myself. I'm very practical. It almost hurts me, I'm so practical. I knew I didn't want to leave New York. I applied to four schools in New York. I got into the four and I picked NYU. It was Hofstra, St. John's, Columbia and NYU and any one of them would have been fine. You realize in hindsight, it really doesn't matter, right? It really doesn't matter.
They always make that joke, what do you call a doctor who graduated at the bottom of his class? A doctor, that's right.
A liability?
Fair enough.
I think there is something to say about that because at the same time the opportunities open up more for you if you're in a quote unquote prestigious school. The employers, the firms that you're trying to get into, they're looking at the schools and they're more impressed with those names. So that's why I think where the advantage really lies.
I have to say that that's absolutely true. And I saw that not only in the opportunities when I was in the school, but even beyond it. There's something about the name dropping and unfortunately that's the world we live in. People buy brand name bags, because it's the brand name. I could see why it's important. Though I always caution young people, don't get into so much debt planning your life because it defeats the purpose. Look at it with a balance.
I think it was a smart choice but you never know where you're going to end up. You never know. So then you graduated law school and you have a position going out. How did you get your first law job?
As undecided as I was in college, that's how undecided I was when I came out of a law school. I didn't want to work in a large law firm, so why did I go to NYU? I didn't know what I wanted to do. I didn't know what I wanted to do with the rest of my life. I really wanted to be a philosopher, that's what I wanted to be, but they don't pay.
And that's the Greek roots, right?
Very much so, yeah. I just wanted to sit under a tree and read Plato and Socrates and talk about it.
I want a podcast just to talk about the issues of the day. Now you can monetize it, but back then that wasn't a thing. So here we are.
Wait, you can monetize this thing? Sure you can.
So I got this wonderful degree. And I spent a good seven years jumping around trying to figure it out. I knew I wanted to do real estate. And funny enough, my siblings, all ended up in real estate. My oldest sister, Evangeline, is a real estate broker. My middle sister became an attorney, also, in construction law, but she left to start a family, so she's an at home mom now.
How did that happen?
Initially my oldest sister started in working in real estate and then my middle sister started doing that part time. And that's where the first rumblings of law school started. I got influenced by classmates also. And then I had the LSAT score, so it all kind of played into each other.
So you know that you want to do transactional. What are you doing when you first started to learn the trade a little bit.
I started at a midsize firm doing real estate and corporate. I worked for a small firm handling residential closings, a private bank working in their high end residential real estate division for loans across the country. A mortgage bank managing the closing department. So I saw the full range. I saw the banking side of real estate transactions. I saw the buy sell side of real estate transactions. I was at the mortgage bank when I decided that I was going to try something new. And would you believe that I might have answered an ad in a physical newspaper and I might have even faxed my resume, it's possible. It's unbelievable. It might've been an email or a fax, but I responded to an ad I saw in the newspaper, for an underwriting counsel at First American. And I had some title clearance experience at that point for my various positions. And I understood real estate transactions inside out. What can go wrong in a closing? And you see every angle of it. And I had also seen the high end and the low end. In one shop, we were doing 30 million mortgages. And on the other hand we would see people have 20 credit card payoffs negotiating settlements with their creditors. So I saw that full range.
But this is all residential, right? Did you have any commercial experience?
I didn't have any commercial experience at that point. None. And I learned all that on the job. Did you start in your position doing residential or did you go right into the commercial?
Straight for commercial. They had a training program at that time, and I had a mentor who I sat with for a relatively short period of time. But in those days, this is pre COVID, we had an open floor. And what that means is that you can imagine the stock market exchange, on an open floor people screaming. That's how it is. And that's how it is in many shops. And I love that environment. I used to study in the cafeteria because I needed the background noise. So I was in this open floor with peers, experienced peers, and you can just run up to somebody and ask questions. Everybody was really nice. We became good friends. So it was that kind of environment, except we were trading real estate instead of securities.
You were underwriting real estate.
Yeah. Underwriting.
What did your job entail?
The title insurance process actually begins way before the underwriter is involved. It involves land searches, searching land records to derive the source of title, basically the ownership of real property and a report is prepared. And in the report, any interests to that property are raised. So you might have mortgages of record. You might have prior owners with interests that haven't been cleared. And basically you produce this report. And it's the job of the underwriter to convert that report into an insurable policy and a policy that's acceptable for somebody who's buying real estate or maybe somebody who's lending against a piece of real estate. Now that sounds basic, but in order to go from the point of exam, all the way to the policy, you really have to understand real estate law. You have to understand trust and estates. You need to understand a little bit of tax law. You need to understand bankruptcy. There's just so many areas of law that converge in title insurance.
And the thing is that when you're the underwriter, you're not just writing, you're clearing the past and your title is going to be at point A, you're going to get it to point B, a different owner, a different lender. You also have to deal with the clients and all the questions that come up. You have to deal with the money and that's something that a lot of people can't handle. The pressure, the volume of money moving, you're the eyes and ears on everything. You also have to consider things that aren't reduced to paper. Think about fraud, right? All you can get sometimes are statements from people and people can lie, right? So you have to have a sixth sense about you too. You have to have that gut instinct that you develop over time. You have to know to ask the right questions. Google is your friend. Google is your friend. We have tools now that you didn't have before.
But at the same time you're searching for violations, judgments, UCCs and mortgages. But then how does a report get prepared? Does a human actually go through all those documents and put that together?
There is actually a human called the reader. So it's the reader who generally prepares the report. But oftentimes they consult with the underwriter. Titles are very complicated. Some of the puzzles that you see in these back chains are enormous. And if there's litigation involved and other things we'll get involved in that process. But generally speaking, the reader will prepare the report and the report will raise all sorts of hairy problems that need to be resolved. And that's where we come in.
And how do you go about resolving something.
It depends. Like a classic example. I've had one situation where you might have a boundary line that's a little bit sketchy. So for example, you might have overlapping property descriptions and something like that It may involve doing a deep dive in the exam to see where the source of the overlap came, to see who's right, who's wrong. It may involve requiring somebody to deliver a deed or boundary line agreement to resolve the issue. Or you may have parties who are willing to take a policy with an exception. That's a classic example of a kind of policy problem. Easy one is old mortgages that haven't been satisfied, those are really lovely because banks go under, people die, things happen. One of the worst ones I've ever had to deal with, where the file was just sitting around and people just kept passing away and we were down to 24 heirs and they couldn't get the property to move because one of the heirs had a judgment and the judgment was larger than her share. of the proceeds, so they couldn't get her to do anything.
You have to know trust and estates too, because if somebody passes away and they're, you have to look at the documents to make sure that everything is in order.
Exactly.
Oh, that's tough.
What about if you have somebody named John Smith?
And then you have the deed years later is from another John Smith, but he couldn't have been the same John Smith because he acquired when he was 60. So there's a lot of title forensics, which is really a lot of fun.
I've probably been on at least six or seven deals with you. You really dive deep and get your, it's not really dirty, but you get your hands papered. Because there's always some issue in every deal. For example, in one deal there was a lis pendens filed against the property, statute of limitations has already passed, but they still didn't want to provide affirmative insurance. What is the difference between omitting something from a policy versus getting affirmative insurance? What is the difference between those two things?
Our position is always best to raise an exception and to get affirmative insurance over it. And one of the reasons why it's better is because down the line, people have forgotten what's happened in the past and some title company is going to raise that issue and suddenly it's going to be a new problem, and nobody's going to know how it was addressed.
So you could have a marketability issue down the line as opposed to something that's out there and insured over. To us that's a no brainer, but for whatever reason, people don't like to see exceptions and they'd rather get an omit. Mortgages or a classic example, you have an old mortgage and maybe we have proof that it was paid, but the bank is no longer available and you're never going to get a sat. But what do you do in a situation like that? Do you just omit it? I suppose you can, but isn't it better to raise it and know that it's insured over? Disclosing, look, I know about this, but I'm going to give you coverage as opposed to saying, we have clean title and then the buyer's attorney finds it and now wants to kill the deal over it. So we always think that disclosure is best, especially if we're making you hole.
It makes sense. If I have a title issue, the first thing that I do is get the prior report to see what happened. And that's exactly what you're saying to do, because if the other title company was comfortable with it, they give affirmative insurance, then this other title company can get comfortable with it. I assume the First American experience and your experience at Commonwealth they're similar because they're similar asset classes.
Yeah, very similar. The time period is of course different. So I was at First American from 2005 through 2019. I went through a lot in those years. When I started in 2005, it was very busy. I described this open floor, phones ringing, and then 2008 happened and the phones went dead. It was surreal.
Because everything went to hell financially. What kind of deals, were happening at that time?
I don't remember the types of deals, but I do remember everybody fell off the earth and then little by little things started trickling back. I don't remember it being a big avalanche. Very different from Covid. The COVID lockdown was completely different than 2008. 2008 was a dead stop. With COVID, it was the opposite. You remember when the city told us, go home? We were working like crazy that week. We were working very hard coming up with creative ways to get the deals done. And the problems we had there were that the clerk's offices were shutting down but the deals didn't stop. Now we're having the reckoning with the office space, that slow down in the office market. And I noticed it as I was walking uptown, boy, Midtown is empty.
I think this is here to stay. I don't think it's like fully work from home, but the offices are not the be all end all in New York City. We work a lot with HPD and have to pull municipals. We couldn't get copies of things, and there was just this huge backup everywhere. Were you experiencing that same thing?
For the issuance of title insurance, you don't necessarily need the municipal searches. So that impacted the buyers, the lenders more. For us, it was just making sure that we have updated land records. And there was some jurisdictions in particular that were really severely impacted And in many situations, the industry resorted to indemnities in some cases. But obviously if you're unable to record an accounting, that's a problem. So we took different measures in different times depending upon the facts and what was going on.
Were you having issues with recording at that time because of not being in the office?
Not so much with not being in the office. We were able to work remotely. We did pretty well. And most of the clerk's offices actually did manage to get some type of online system where people were working from home, but you definitely noticed a slowdown. There were challenges. I think the biggest challenge was people didn't want to see each other. People didn't want to go to closings. They didn't want to sign in person. We had people go to people's homes, meet outside in the back, there was a lot of irrational behavior. I think that that was really an experience.
You talk about how the clerk's office adapted and figured out a way to make it work during COVID. You've been in the industry for so long. I'm curious to know, what are some of the significant changes that you've seen to the industry as a whole that have really impacted the industry?
We used to do sit down closings. New York is very different from other states. I remember I was working in the California market when I was at the private bank. Everything was done in escrow. They had an escrow department and you would go to the escrow department and the buyer would sign documents and the seller would come and sign documents. They never even had to meet and the escrow department would close the transaction. And that's how it worked. And that's how many states do things. New York, we were always an attorney state where people friendly, you have a closing, you have the manila folder set up, everybody sits around the table, they order lunch, right? Where the bagels? It was a sit down and you would send a closer there and you would have closure at the closing. You'd have your documents, you'd have your copies and you'd have your policy. That's gone. It was already gone before COVID and COVID just put the nail in the coffin. Now everything is in escrow. When we have a sit down closing 10 percent of the time, we're so happy because you have a closing you see people. Otherwise, it's just you're in an office, the paper comes to you. Technology has changed this industry for the better and the worse. I remember when I was interning, oh, so many years ago during law school, and I was working in a small firm. I think I was working in shipping claims. Don't even ask. And they used to get letters on paper. That letter would take three days to arrive. You would have to read it, respond. Now you get an email and you need to respond immediately. And you have 17 emails. That are coming at the same time. So technology has made things better and it has made things worse. It's somewhat easier to do an escrow closing if you're an attorney, but it's obviously harder for the title insurance company.
The title insurance company is kind of your hero. It's your safety net. I always feel comfortable when I have a good person to work with, like yourself. The title you're getting is very important for the lender. Tell us a little bit about some of the intricacies of these lender policies, which are a little different than the owner policies because they're shelling out 90 million for construction loan or $20 or $30 million for a perm loan, they have specific expectations. They're not willing to accept just anything.
Yeah. And actually oftentimes coverage that is available for a lender is actually more extensive than for an owner. And part of that is because of just the fact that we're filed states so our endorsements are filed and you're more limited in what you can give to an owner, but also the risk of loss is less for a lender because you really experience a loss if there's a default. Whereas an owner, if you have a fence, that's off the record line, the day after closing, you have a claim. Whereas with a lender, what's the chances you're gonna suffer a loss because a fence is off. So lenders do want more extensive coverage, but I tend to think that the risk is far less when you're dealing with the lender than when you're dealing with an owner.
What kind of claims have you seen
I don't really get involved too much in the claims unless there's something that I was involved in. I had one situation once where the claim wasn't due to us, it was because of a surveyor error and that was just what it was and the claim went away when they renovated the property anyway. So there's some things that are completely out of your reach. The most common claims are mechanics liens and authority.
And what that means is mechanics liens, obviously you're working on a project, you have cost overruns, the owner is not liquid anymore and you stop paying people, everybody's going to come out of the woodwork. So those can go sideways easily. And authority has to do with who's authorized to sell the property. How much due diligence can you do? If somebody tells you there's three members to an LLC and they lie. That's where a lot of claims come. I'm surprised that we don't have more if you think about it, because in New York, at least for a lot of these entities, you don't have a public filing and you have these small entities. I credit that to it being an attorney state. You're not dealing with people who are representing themselves. You have people who are represented by counsel. Most of the time, they're large names, even when they're not, they're people who know their clients. So fortunately, I haven't seen too many problems in that area.
You're taking their word for it. It's not really surprising because, what's stopping the client to give you a different operating agreement,
And also, not necessarily even from fraud, a lot of these organizational documents can get very complicated. You're down 15 tiers and you find there's a silent member who has consent powers.
That's when it's important to have someone like yourself, that's really knowledgeable and understands this stuff.
And the attention to detail is very important.
And I always say you have to look at the transaction from a distance and at the ground level. It's very difficult to do because you have to understand the big picture or you'll miss some issues, but you also have to look on a ground level. Otherwise you'll miss the devil's in the details.
Yeah, there are definitely details, particularly when you have a mix of title issues. So, one of the things I, maybe I want to turn to the title affidavit, which is also an interesting thing to me, because it's the same kind of concept where you're just taking their word for it. They're indemnifying you, but if they're selling the property, they're likely liquidating, so they're probably not going to be available. What real purpose does that title affidavit really serve? People generally do like to be honest, if you're statement is admissible in a court. So it forces you to disclose certain answers. And I've had situations where the title affidavit revealed truths that were important to a transaction.
I revised those so that you know what's actually transpiring.
And you're not going to want your client to sign something that's not correct. And they're not going to want to sign it. Sometimes individuals who don't have counselor are picky. They'll call you and they'll say I don't feel comfortable signing this. And I'll talk it through and we'll get to the core of what the issue is. So, I do find them helpful.
And what about surveys? So, you don't have to have a survey, but it's a good idea to have one.
Oh, yes.
You want to just touch upon why that's a good idea, why the survey is read in? Because, despite that land records may not show an issue, the survey by itself could show encroachments, easements, and other things that could be problematic.
When you read a survey, you can't necessarily know just by looking at it, is this easement something that's a problem? You could spend weeks just on this one issue.
You can. Well, you can buy a property without a survey. And what some people don't realize, I'll explain it here. When you're buying a title policy, we're insuring a piece of land and we measure that land by dimensions. It's a forty by a hundred lot. We're not ensuring that there's a house on it. Somebody says I'm buying the house. No, you're not. You're buying a land forty feet by a hundred. If you want to be sure that your house is on and go get a survey, because if you're buying upstate, there's no guarantee that what you think you're buying is where you're buying it. So one of the purposes of the survey is for the client to figure out if they're buying what they think they're buying. But when we read in a survey, just think of this, a policy without a survey excepts out anything that a survey might show, including the fact that there's no house. So when we read it in, what we're interested in knowing is what does a visual inspection of the property tell us by way of possible other third party rights to the property. A fence that's offset might tell us that somebody else might be using that area. You might not be able to move the fence. He might be asserting, at the very least, use of that little corner. Or maybe the building encroaches onto the street. Maybe that has no impact, but it's something that you should know and we're going to accept that out. There may also be a gate. A gate is an indication of a possible right of somebody to come in. Does it swing this way? Does it swing that way? Who controls the gate? All these details come into play. So the purpose of the survey reading is we're taking a general exception that covers anything that a survey would show, and we're narrowing it down to cover just what this specific survey shows. And we're just going to point out any offsets, any apparent easements or rights of others. And that's what
It's all about third party, right?
It really is all about third parties.
And what's the purpose of having the title company or the lender also certified under the survey.
It has to do with assurances running to the benefits. So if the surveyor makes a mistake, if it's not certified to us, , they're not obligated to us in any way. I haven't worked in claims, but that may be an aspect of that. Another point is to make sure that it's a title survey. You can get other types of surveys. You can get topographical surveys. You can get subdivision surveys that don't show the improvements or don't show the offsets. And that's always an interesting conversation when somebody buys a survey that doesn't do it.
You want a specific survey that you're going to read into title what are the other types of surveys?
Somebody might be subdividing a parcel so they may have a subdivision map done. You can have a, I call it a title survey on steroids. You can have an ALTA survey, which has certain requirements that are added onto the title survey. But we typically will see subdivision maps. Topographical surveys, boundary surveys. There are times when people just need to create a legal description. But a title survey is going to show improvements and it's going to show the offsets on the boundary line.
How do you go about and resolve and what if you don't get an answer? How far are you gonna go to get this done?
Here's the secret. You can always find the answer if you have the time. And the question is always a matter of time. I'll give you two examples. Like the one example I had, I had a property out on Long Island and there was a question of whether there was an easement to access the body of water. We were able to do a deep dive and I actually went to the property to see with my own eyes. And when you saw the visual, you were able to paint the picture and there are other times when it's a much more involved exercise. And I know that sometimes you I can't get involved because there's no time. The greatest project I've worked on, was a nine month endeavor. Look, I've worked on the Empire State Building, I've worked on the Chrysler Building. The most impressive project I've worked on was a vacant piece of land in Dutchess County. It was the site of a power plant that they were going to build. Because it was such an intensive construction project, it was very high liability. They wanted to really be sure that they had done the search right. And there were easements affecting the property. They were former train tracks affecting the property. This was crazy. So we did a deep dive back to like 1800s. There were instruments coming from foreign governments in the chain of title. It was interesting. I did find answers. I had been trying to figure out how the train track played into the property. There was some offsite mining going on. And I was trying to piece together the history of the project to understand how these easements would they benefit. And I ended up finding these maps from the 1800s. And because of the train track and the crossroads, I was able to pinpoint exactly where this property was. And you know what I discovered? What, we look at as vacant land today. That was happening back then. It was the happening town. It was like the center of their world. It was a big development area. They were mining stone and shipping it down into Midtown Manhattan to build these fancy buildings. Back in the day that was the place to be. The research took me to the New York Public Library. There was a one point where I couldn't find the maps because they were so old. So I Googled and I found out that New York Public Library had them. And apparently they have some secret rooms and they have like a dungeon. This is a true story. You get permission. You need special access. You need special access. They give you a handler. You had somebody walking you through. Yeah. You handle everything with gloves, they're watching you like it's a bank heist. So I actually went that far for this, I went that far for this project, and I was able to piece it all together with all the materials I found online painted a great story of the whole history of this area. And because I had the nine months. I was able to really bring that to a close and get comfortable with the title I was insuring, but that's a rare situation. You never get nine months to work on a project. That converts back to you finding the bigger picture and seeing exactly what you're insuring. You have to, because if you don't understand the big picture, you can't understand the details. and it's very difficult, because you're working at a pace where you're focused on the details. You need to be able to pull back and understand the transaction and understand the land.
Have you ever hit a wall where you're either run out of time or you just, you can't find any evidence that shows that this is insurable and then you just have to say to them, we can't insure this piece of property.
Yes, that has happened. And the only thing I'll say is that if you're trying to buy a property to develop, it's not enough to have insurable title because if somebody is going to challenge you or prevent you from doing what you want to do, my giving you an omit or affirmative insurance isn't going to change the facts. You might get your money back, but you're not going to be able to build what you want. So I always say that part of title insurance is not just insurance, it's due diligence. So the due diligence aspect is, is this the right property for you? It might not be. So yeah, I have had that situation.
It's knowing what's there and make sure that title is sufficient for you to do what you want to do.
Absolutely. Yeah.
What kind of guidance do you get as to how much work you can put into this? Because these deep dives are significant, but how else do you resolve these things?
It depends on the project. There are industry standards and keeping in mind when you work in New York City, there's a lot of turnover. So chances are, even within our own family, somebody might've insured the property already of fidelity family companies. So when you're dealing with properties that have been insured before, their industry standards, depending on property type, how far back they need to go, how many insured deeds back you need to go. But when you're dealing with ground up construction, for example, the tendency is you're going to be more diligent. And in, in my situation, we had instruction, go far back because there were easements. There was a lot going on in this particular corner of the world. Quite fascinating.
Is there anybody else that has to be convinced other than you?
We have internal controls, so there's certain liability levels at every level, but most of the time I make my own decisions , but there are certain things where I, myself, if I have an issue, that's questionable or gray, I'll call it for him. I believe in collaboration in this area, especially if things aren't black and white and they're gray, you don't want to make a mistake. Like I said, it's not just the policy. It's really, are you delivering what people think they're getting? And there's a lot of disclosure that comes to mind. If the bank is lending money, you need them to know certain things. And by the way, I found this, but I'm comfortable and I'm going to insure over it. So there's a little bit of that that comes into play too. But yeah, we do collaborate quite a bit.
I would imagine you do and we do as well, but if, especially if you have something that you feel you want another set of eyes on when you've been digging deep, you're so close to it. You want somebody else to look at it.
That is true. Yeah. You get biased. And another thing that I found helped is sleeping on it. Believe it or not. I have found that there's a certain thinking process that happens overnight that you can't tap into during the day. You think of different angles the next day, and that's why I always am more fearful when I'm in a rush to close, and there's a problem that's more disconcerting. That's more troublesome than if you have a couple of days even to let it marinate, to look at it from different angles. It makes a big, big difference.
There's scientific evidence that information gets organized in your brain while you sleep, which is why you sleep on it.
When you wake up, you can look at it from different angles. I found the same thing when I'm struggling sometimes, not always, the next day, I'll have a fresh view on it, or at least a different take on it than I did the day before.
That overnight fresh perspective will say, okay, let's take a step back and figure out the big picture. Is this a problem for that big picture?
Exactly. That's exactly right.
What would you say to the people who are listening, who are real estate practitioners, attorneys, landowners, developers, something that they should know about title that they don't or mistakes they're making.
I always say that there's a value in having a third party handling your funds, but I can't really say that I've been shell shocked. I also work in a very seasoned industry. The New York real estate industry is very commercially savvy. So, it could also be that it's the people I work with. You're working with people who know what they're doing. And have been doing it for a while. And you've absorbed that. People are probably now looking at you for guidance, I assume, doing this for 17, 18 years.
Maybe 20 at this point.
Is there some part of the industry that you wish would change.
The only thing that I'll say is that COVID did change things a little bit, not necessarily for the better
Is it because of deal volume being down or just generally because people are not really in person, less people are in the city?
I think all of the above. You do feel a difference.
I think things will evolve and change as time goes on. But this period is here to stay for the present.
And they also think that there's going to be a lot of movement. I've been seeing a lot more transactions across New York that I hadn't seen before. A lot of activity in other parts. And there's been buzz, in not just the real estate industry, but in general in business, circling around, where do we put our businesses,? Do you do have to be in one location versus another? Can you be in the suburbs? Can you be in these places? I don't know where those places are going to be, but business will continue. And I think people are going to be working everywhere.
And it's, in the city, outside of the city. And that's what we're experiencing now. Whether that'll stay the same for the next 20 to 30 years, I don't know, but it's definitely here to stay for the next couple of years, at least. I wanted to talk about the TIRSA Rate Manual changes. Can you explain to us what its purpose is and what are the changes? Why is this change happening?
Generally speaking, the major change is that there are going to be many more endorsements available in New York. As you know, New York is a filed endorsement state, so we can only issue filed endorsements.
What does that mean?
It means when you buy a policy, you attach certain endorsements to your policy. And if you ever practice that. In other states, you'll find that the range of available endorsements is much broader. You have all these different types of endorsements and coverage that you don't have available in New York, at least didn't up until this time. So the workaround up until this time is that in New York, we would give primitive insurance for certain types of encroachments, certain types of exceptions. So the difference here is that now there's going to be an endorsement for that type of coverage. So the long and short of it is that the customer will have more options available to them. And the format is going to be a little different. A lot of the coverage that you were already getting, you're not going to get in the form of written affirmative insurance. You'll get it in an endorsement form and there'll be other types of coverage that will be available that aren't available now. You'll have to stay tuned for that. Yeah, that's the follow up.
Just two quick follow up questions about that is does that make it better or worse? And in that context, I mean, what you said earlier, which I thought was great, is that if you're getting affirmative insurance, you can kind of look back at it.
This is the issue we're going to ensure over it. We are satisfied. But. Now you're getting an endorsement, but that endorsement is general. It's not specific.
In some context, it can be specific and relate back to certain acceptance. So the availability of coverage for the options for the customer are not changing. They're not going to be reduced. They're actually going to be broader. So you don't lose what you had. It's just delivered in a different format. So instead of delivering it on a silver platter, we'll deliver it on a gold platter.
Oh, okay. Fine. I like gold better. How do people know about, all the endorsements are available.
The industry will be distributing the new rate manual and more materials to follow. But of course, we'll always be available. And I'm sure that my phone will be busy, whether I'm busy with work or not, I'll be busy with questions on the available endorsements.
We were like a hotline when 485X came out, so we understand.
And most of the time, especially with lenders, we'll get a request that's much broader than what's available and we have to whittle it down. So now I assume we'll get the same request, it's just that now we'll be able to deliver more.
A lot of lenders, they're lending all around the nation. So they don't necessarily know that something in New York is not available.
That's correct. But we don't really have much pushback there because it's understood that if you're in a filed state, you can't issue something that you're prohibited from issuing. So we don't really have much difficulty there.
So is this going to be uniform in terms of the endorsements that are available nationwide so that New York corresponds? Or is it just a change for New York to provide them with more endorsements, similar to what other states have.
It's the latter, because every state is different. Every state is regulated very different. And if you've ever done national work, I've done some national work, it's tremendously different. And even the endorsements are different. Sometimes they're available in some states, sometimes not in others.
Well, I think I've grilled you to the nth degree and I've learned a lot. And I, I always learn a lot when I call you and when we try to tackle these issues, I just sit back and listen and wait for you to get back to me with all these documents and then a solution. Not a lot of writers are like that. A lot of people don't go that extra mile. Exactly. I think you go more than extra mile. I think you go an extra five miles. When I first met Art a while ago, he was singing your praises, she's amazing, she's great at what she does. And that's why I wanted to have you in. Please everybody contact Commonwealth, if you have any issues, and Zoy Balaskas, we'll put her information in the notes.
And if you have any, anything else to say in closing or something else that you want to talk about, please feel free to wrap up
Just it was a pleasure to join you today. I do enjoy the title. I enjoy title forensics as I call it. So of course I welcome any calls or any questions from anyone, but it was great to be here.
Thanks.
Appreciate it.
Well, everyone, that's our show. Thanks so much for listening.
And of course, don't forget to subscribe. Also, don't forget to leave comments because we love to hear from our audience, right? Brenda?
Yeah. Feel free to reach out at [email protected] or visit our website seidenschein.com. We really look forward to hearing from you.
You can also reach out to David and Brenda at [email protected] and [email protected].
Those are lengthy last names. You can just find us on our website.
That's right.