Convicts can acquire title to real property, but in some states their capacity to convey or encumber, except under court proceedings or with some form of governmental approval, may be limited or impaired.
State law must be examined in order to ascertain whether there is an impairment or disability in the execution of conveyances or other real estate documents by convicts.
For example, at least one state, Hawaii, provides that no conveyance by the convict has preference over a claim of any person entitled to damages for private injury committed by the criminal unless the purchaser is ignorant of the conviction. Another state, Rhode Island, prohibits any conveyance by an inmate unless the superior court approves the transfer.
At common law, a convict was subject to "civil death": a convict could not sue, or enter into a contract, but could convey land by deed. As the law has evolved, numerous states have enacted provisions for management of the inmate's estate by appointment of a guardian (including Hawaii, Maine, Maryland, Mississippi, and Ohio), a trustee (including Missouri and New York), a committee (including New York [which also provides for a trustee], Virginia and West Virginia), or other representative (including Iowa [spouse], Kentucky [curator], Oklahoma [spouse], and Rhode Island [administrator]). If the state where the land is located authorizes management of a convict's estate, the management procedure must be required, and you must additionally secure joinder by the inmate in the transfer, unless you secure specific approval from a Senior Underwriter.
Insurance of titles coming through instruments executed by inmates, without court or any form of governmental approval, may be considered extremely hazardous.
Repeatedly, these instruments are being subsequently attacked by the inmates themselves on the basis that they were executed under duress, under promise of a certain benefit never received, or during a period of emotional or mental instability.
Careful consideration must be given to any possibility of disaffirmance or attack by the inmate, prior to deciding on the insurance of the title. For example, you should consider whether the crime or criminal proceeding evidenced possible incompetence of the inmate.
If a sale is occurring, the conveyance must be an arm's length transaction, and the inmate must be receiving current valuable consideration (for example, as opposed to prior debt such as legal fees). If the inmate is executing a mortgage, you should decline to issue unless the mortgage reflects a refinance of a previously secured debt.
Inquiry should also be made as to whether the crime for which the inmate was convicted may be basis for forfeiture of title to the real estate; this is particularly apropos if the inmate was convicted of a drug-related crime. If so, you should not issue a policy on the transaction involving the inmate without consulting a Senior Underwriter.