As the real estate market resurges in Los Angeles, title companies are finally reporting relief from the battering they took during the recession.

“Our business, especially on the resale side, is up tremendously,” said Joseph Mazza, chief title officer at First American Title Co. of Los Angeles.

Like other title insurance companies, First American recently hired more title officers and assistants to handle the increased workload. “It’s a great problem to have,” Mazza said.

The title industry ebbs and flows with the health of the real estate market. When the market is healthy, property values rise, which draws buyers. Title companies insure those buyers and their mortgage lenders from losses resulting from any existing legal claims, such as fraud or liens, that might hinder transfer of ownership.

In L.A. County, 74,080 properties were sold in the first six months of 1997, up 7 percent from the like period of 1996. The increase is more pronounced when compared to the decade low of 51,813 sales in the first six months of 1993, according to Experian Real Estate Solutions, a real estate information company.

Title insurers’ level of business correlates with the volume of sales rather than the prices of properties sold. Title insurance is unlike casualty or disaster insurance, where premiums are paid annually and the level of risk determines the amount of that annual premium.

The recovery of L.A.’s title industry began in the office and industrial sectors. Frank Jansen, senior vice president of Chicago Title Insurance Co., said his office and industrial division saw its monthly volume of closed property sales rise from 30 transactions in 1995 to 60 this year.

Jansen’s office handles title insurance transactions nationwide, and he said the California market share has grown from 20 percent of sales in 1994 to 50 percent last month.

Residential title insurers say the recovery began to jell in their sector last year. Sales of new and previously occupied homes in Los Angeles County totaled 98,778 in 1996, up 14 percent from the previous year, according to Experian.

Niche title companies that deal strictly in residential insurance are expecting 1997 to be their best year this decade. Steve Barth, executive vice president of Santa Monica-based Equity Title Co., said the Westside housing market is “really roaring back.”

For the first half of 1997, 7,243 homes were sold in West L.A., up 15.5 percent from the 6,270 homes sold in 1996, according to Experian.

Jim Waterman, vice president of Progressive Title Co. Inc., a division of residential brokerage Fred Sands Realtors, said five new staff members have been added to handle the doubling of its business in the past year.

Title insurers say they are still cautiously adding staff. Many companies laid off up to 45 percent of their work force when the market collapsed in the early 1990s.

“Historically, our industry has stacked up on employees when business is busy and then laid all those workers off,” said Glyn Nelson, county manager for Commonwealth Land Title Co. He added that most title insurers are looking for ways to streamline their paperwork before they’ll consider hiring.

Title insurers remain optimistic that the market’s recovery will further accelerate especially on the residential side once the new federal budget agreement takes effect. Homeowners can now exclude up to $250,000 or $500,000 for married couples in capital gains on the sale of a personal residence. The rule is retroactive to May 7.

“You’re going to see a lot more listings, especially from empty-nesters who would rather buy a smaller house and elderly couples who (prior to the tax cut) were just going to will their homes to their kids” to avoid a hefty capital gains tax, said Gary Bregman, a lawyer for Old Republic Title Co.

Title insurers also expect the number of property refinancings to rise as the market tightens and property values increase, further boosting their business. Last year, 144,332 people refinanced their properties, up slightly from 142,737 in 1995, according to Experian.

“People (who refinance) are deciding that maybe they’ll pull some equity out of their homes,” said Richard Lisi, county manager at Old Republic. “So they can finally do some of the things take vacations, buy a motor home that they’d wanted to do but couldn’t for the past few years.”