Frequently Asked Questions
Understanding titles and title insurance can be tricky. Let us help.
What is A title?
A title is the legal right that a person has to the ownership and possession of land. If someone other than the owner of a property can establish a claim, they can claim an interest in the property outright or make demands on the owner (i.e., you!) as to its use.
How is that possible? what MAKES a title defective?
Any number of problems that remain undisclosed after even the most meticulous search of public records can render a title defective. These "defects" are dangerous because you may not learn of them for months or even years after the purchase of your home. Once discovered, though, they could force you to spend a significant sum of money on a legal defense that could still result in the loss of your property.
how can title insurance HELP protect me?
Your title insurance policy will typically cover you from a host of prior or concurrent defects on your title, including:
- Deeds executed under false or expired powers of attorney
- Mistaken interpretation of wills and trusts
- Incorrect representation of marital status
- Undisclosed heirs
- Mistakes in recording legal documents
- Incorrect legal descriptions
- Forged deeds, releases, etc.
- Federal or state inheritance and gift tax liens
- Errors in tax records
- Federal condemnation without notice filing
- Capacity of foreign fiduciaries
- Duress in execution of documents
- Want of jurisdiction over persons in judicial proceedings
- Deeds from minors or non-existent entities
- Discovery of later will after probate of first will
- Easements by prescription not discovered by a survey
- Deeds delivered after death of grantor or grantee, or without consent of grantor
- Deeds from incompetent persons
THIS IS CONFUSING. CAN YOU GIVE ME AN EXAMPLE?
Absolutely. Let's say that, after saving up, you made your $35,000 downpayment and have just settled into your new home. Suddenly, you learn that a child born after the date of the seller's will is claiming his interest in your property. After an exhausting (and expensive!) legal contest, that child's claim could be found to be valid. The result? You lose both your home and your downpayment.
Owner's title insurance not only protects you from actual financial loss covered by a title problem but also provides the same protection to your heirs for as long as they own the property. Your title insurer even agrees to bear the full cost of defending you against any such covered claims.
What's the difference between an owner's policy and a lender's policy?
A Lender's Policy only insures that the financial institution you're borrowing from has a valid, enforceable lien on the property. The Owner's Policy, on the other hand, is designed to protect you from title defects that existed prior to the issue date of your policy. It also covers the full cost of any legal defense of your title for any covered matter. (In a nutshell, the Owner's Policy protects you, the owner. The Lender's Policy does not.)
How much does title insurance cost?
It varies based on a number of factors, including the type of home you're purchasing and where it's located. But take heart: it's typically less expensive than your annual car insurance. You pay it once when you purchase your home, and it continues to provide coverage for as long as you or your heirs own the property.
when should i start looking into this?
Give us a call as soon as both you and the seller have signed the earnest money contract, or ask your mortgage lender or real estate agent to get in touch. With a brief summary of the details, we can begin searching public records and issue a title commitment.