Title insurance is an insured statement of the condition of the title or ownership rights to the property. An owner’s policy describes the property in detail and indicates the limitations that may be upon the insured property or what the ownership is subject to. Some of these could be existing liens, encumbrances or easements. The policy guarantees that the property is free and clear of undisclosed liens, disputes in the rights of ownership, and other clouds that could be on the title. The provisions provided in the policy state what the title insurance company will do in the event a flaw arises in the title or if the rights of the ownership are challenged. Basically, the title insurance companies agree to defend the title in court, correct or clear the title when possible, and pay the owner or insured for the loss if there is an unsuccessful defense of the title. The policy in essence is giving two coverages - one for the legal expense to defend the title and the other provides reimbursement to the owner in the event of a loss.
Knowing that a home is one of the biggest investments we all make, title insurance affords most of all peace of mind to the purchaser. It takes the risk out of the unknowns of the legal history of the property being purchased. All property has passed through many hands in the past, and every transaction lends itself to potential errors as it has passed through a sale, bankruptcy, inheritance, or foreclosure. The title to the property is in jeopardy as to these errors if they arise. For a one time premium paid the owner can have the peace of mind that they are protected from any adverse claim to the title as long as they own the property.
Some of the risks against which title insurance protects include:
- Forged deeds, mortgages or other documents of record.
- Adverse claim of equitable lien.
- Signatures of minors or mentally incompetent individuals.
Fraud.
- Undisclosed but recorded judgment liens.
- Misrepresentations of marital status.
- Wills not probated.
- Special assessments which become liens upon passage of a law or ordinance, but before recorded notice or commencement of improvements of which assessment is made.
- Ineffective release of prior satisfied mortgage or lien, as fraudulently obtained by predecessor in title.
- Deed from legal nonentity or a deed challenged as being given under fraud, undue influence, or duress.
- Invalid Divorces.
As you can see there are many potential risks involved and we have only scratched the surface in the above list. Knowing that a home is one of the biggest investments that an individual or family will make in their lives much care needs to be givin to the quality and marketability of the title. Homestead Title can assist in giving that peace of mind for you. Please consider utilizing our professional staff for your title insurance needs. We are here to serve and do enjoy making a difference for you and your client. Homestead Title; Insuring with experience, integrity, and trust. Expert connection for real estate professionals. Contact us at 913-390-8880.
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