How Title Insurance Works

If you want to buy a house, you’re going to need title insurance, but very few homeowners know what title insurance is or how it works. This is a shame because while title insurance is very rarely needed, it can protect homeowners from huge financial losses.

What Is Title Insurance?

Anytime an individual decides to buy or refinance a house, they will have to get title insurance. Title insurance is a type of insurance that protects buyers and lenders from financial loss if ownership of the property or title is challenged. Title insurance was created over one hundred years ago when dishonest individuals would sell property they didn’t actually own. With the rise of the Internet, determining whether or not a seller actually holds the title to the property is much easier, but unfortunately, not foolproof. Although every homeowner will purchase title insurance, very few are actually aware of their rights if they need to submit a claim.

The Rising Cost Of Title Insurance and Bad Faith Claims

You would think that because technology has made searching for information about property titles easier that title insurance would become less expensive. However, prices for title insurance are actually increasing. One of the largest title insurance companies, First American, has actually doubled its prices over the past decade. This is easy for title insurance companies to do, because most states have laws in place preventing other insurance companies from offering title insurance. This means the title insurance market is small and faces little competition. In total, title insurance is an $18 billion industry.

Not only are the costs of title insurance rising, but many policyholders are also discovering the hard way that title insurance companies often use bad faith tactics to avoid paying out on claims. Like any other type of insurance, a title insurance company’s first objective is to make money, and some companies take this objective too far by wrongfully denying valid claims. Unfortunately, many policyholders are completely unaware of their rights and accept the claim denial at face value.

Get Help With You Title Insurance Claim

Buying any type of property is a huge investment, so before you sign on the dotted line, it’s important to make sure all related contracts are fair. At Feldman & Feldman, we can review title insurance policies to make sure they provide proper coverage. If property has already been purchased, we can help with any title insurance disputes. Call us today to schedule an appointment to learn how we can help.

Duties Business Partners Have To Each Other

Starting a business is incredibly exciting, but many first time business owners don’t anticipate the many responsibilities involved with running a business. When partners form a business, they must fulfill certain duties to each other. When one or more partners fail to fulfill these duties, partnership disputes arise and can jeopardize the whole business.

Partnership Duties

Partners must always put the interests of the business ahead of their own personal interests. This non-delegable duty can be broken down into several specific duties:

  • Duty of Good Faith and Fair Dealing – Partners must always act honestly and fairly regarding the business. Deception or misrepresentation violates these duties, and partners can be held responsible for their actions.
  • Duty of Loyalty – Partners owe a loyalty to the business. This means partners cannot engage in self-dealing and must avoid conflicts of interest. If there is a conflict of interest, the affected partners must immediately inform the other partners.
  • Duty of Care – Partners will make many business decisions, some on a daily basis. When making decisions, partners are expected to act reasonably and with care.
  • Duty of Full Disclosure – Every partner has a right to certain information regarding the business and the other partners. Partners must disclose to other partners information such as potential business opportunities, contracts entered into, finances, and operations.

Resolving Partnership Disputes

Partnership disputes are very delicate legal matters. If not resolved quickly and efficiently, these disputes can snowball out of control and destroy a business. The best way to preserve a business at the heart of a partnership dispute is to work with an experienced business attorney. A partnership dispute lawyer will be able to assess the situation and devise a strategy for resolution that protects the hard work partners have put into the business.

Houston Partnership Dispute Lawyers

If you are facing any type of internal conflict, don’t wait to get the help of a Houston partnership dispute lawyer. The sooner you involve an attorney, the better you can protect your business. At Feldman & Feldman, our business minded lawyers understand each dispute is unique. Not all partnership disputes are destined for the courtroom. We create unique action plans to resolve business disputes. Contact us today to schedule an appointment with one of our Houston partnership dispute lawyers.

What Type Of Business Should I Form?

Starting a business is incredibly exciting, but few people understand how the type of entity they form can affect them later on. Deciding what entity to form can have beneficial or catastrophic consequences for not only your business, but for your own personal finances. While there are many types of business entities, the business lawyers at Feldman & Feldman see the following most often:

Limited Liability Company (LLC)

Limited Liability Companies or LLCs do just that – limit liability. When you form an LLC, your business assets and debts are separate from your personal finances and assets. This means the assets of the business are exempt from the owners’ creditors. LLCs allow creative allocation of the profits and losses incurred by the business among the owners. LLCs also have flow-through income taxation, meaning the income generated by the business is filed as part of the owner’s personal income, preventing the profits from being taxed separately.

Sole Proprietorship

Sole Proprietorships are relatively easy to form and operate and do not require state filings; however, the owner remains personally liable for any lawsuits or debts against the company. Many people opt for sole proprietorships when they are starting their businesses because they are less expensive to form, but this could leave business owners vulnerable to more costly situations in the long run. People considering a sole proprietorship need to really consider whether the risks make this entity choice worthwhile.

C Corporations

Similar to LLCs, C Corporations can limit the individual liability of directors, officers, shareholders, and employees. Owners also have the ability to sell stock, which can help attract investors. One big downside of a C Corp is the possibility of double taxation, where business profits are subject to taxes and the dividends paid to the shareholders are subject to taxes. C Corporations are subject to lots of regulations and complicated tax filings, so many will require the help of a skilled business accountant to file taxes.

S Corporations

S Corporations provide the same limits to liability and investment opportunities as C Corporations, but without the double taxation. Owners of S Corporations report their share of profits and losses on their personal tax returns and the income is only taxed once. Not every business qualifies to be an S Corporation, as only legal U.S. citizens or permanent residents can own them. Additionally, S Corporations also limit the number of shareholders to 100, which can limit growth potential.

Partnerships

Partnerships are a popular entity choice for small businesses because they are easy to form and operate; however, partners remain personally liable for company liabilities and business debts, even those incurred by another partner. Partners can help protect themselves by adopting a partnership agreement, but many business owners rush into formation before creating one.

Speak With A Business Lawyer

Before forming a business, it is crucial that you speak to an experienced business lawyer at Feldman & Feldman. The implications for each entity are incredibly complex, and only a lawyer will be able to evaluate your situation and advise you on the best type of entity to meet your needs. We can also assist with filing the necessary paperwork for formation, drafting partnership agreements, and advising on any business law matters. Schedule an appointment today to speak with one of our attorneys.