Florida Title Insurance FAQs

The various types of insurance are often lumped together to those not “in the know” – leaving many people confused and frustrated when they try to understand different aspects of each kind. Title insurance is one of the last things you need to think about when investing in your home, but that doesn’t mean it is any less important to understand than property tax, for example.

At the law offices of Gary I. Handin, P.A. we believe that knowledge is power, and so we’ve compiled the most frequently asked questions surrounding Florida title insurance. We can issue it through the law firm of Gary I. Handin, P.A. or through Florida Home Title Company, a Florida licensed title insurance company owned and operated solely by attorney, Gary I. Handin, since 1993.

What Is Title Insurance?

Title insurance is your protection policy against loss in any case where a claim is made against your ownership. It is a one-time only payment, which is paid at settlement.

Title insurance assures you as the buyer that you have better title to the property than anyone else in the world. It also protects your home from hidden issues, such as unpaid mortgages, liens, judgments against the prior owner(s), unpaid tax or tax liens, mechanic’s liens for work commissioned by the previous owners or complications with previous ownership.

There are two main types of title policies: the owner and loan policies.

• The owner’s policy: protects the homeowner and remains valid for as long as you own the property.
• Loan policy: protects the lender’s rights and remains valid until the loan is paid off.

In the event that a claim is made against your property, you would rely on title insurance to:

• Assure you of a legal defense
• Pay all court costs and fees
• Reimburse you the loss up to face value of the policy (if the claim is found to be valid)

What Is A Title Search?

The role of a title report is to examine public records to make sure the property you’re looking at is actually available to be sold. That may seem like common sense, but these laws exist for a reason: strange things have indeed happened!

A title report also provides a history of who has previously owned the property, as well as any liens or unpaid mortgages on it — all things you and your attorney need to know as you make the important decision of whether to invest in the property.

If you have questions or concerns about the property you’re looking to purchase, your real estate attorney can help.

What Does Title Insurance Cost?

In Florida, the cost differs depending on the property’s purchase price, as well as the contents of the policy. Nearly all other insurance premiums require annual payment, but title insurance is a one time payment which protects you as long as you own the property. The state of Florida sets the price and defines a promulgated rate calculation as follows, which is used to determine the amount it will cost you.

• For purchase prices below $100,000: title insurance fee = $5.75/thousand
• For purchase prices over $100,000: title insurance fee = $5.00/thousand

It’s important to note that title insurance is not the same as homeowner insurance. While title insurance protects your ownership of the property, the premium is paid in a single one time payment when the sale of the property is closed. Homeowner’s insurance protects from loss, damage, and theft and is paid annually.

Who Is Responsible For The Cost?

In your contract you are able to negotiate who will be paying it. Most counties have the seller choose the title company and pay for the property’s title insurance. In the following counties, however, the buyer typically chooses the title company and pays for it:

• Broward County
• Collier County
• Miami-Dade County
• Sarasota County

All costs are contract-specific and usually negotiable with the help of your attorney. We recommend you request a no-obligation, free title insurance quote so you know exactly what fees you are responsible for.

Do I Need Title Insurance If I Pay Cash?

Lenders universally require the protection a title insurance policy provides. However, according to insurance law in Florida, title insurance is not required. The cost of the policy will differ depending on amount of coverage and the contents of the policy required by the lender.

As an attorney for a purchaser, I can tell you that an owner’s title insurance policy is imperative to assure that you are the true owner of the property you have purchased and paid for and that there are no liens on the property as of the day you close on your purchase.

Whether you’re buying a commercial or residential property with cash or a mortgage, an owner’s policy protects the homeowner and remains valid for as long as you own the property. You can’t take too many precautions when it comes to ensuring a smooth purchase of your new home.

What Are Common Hidden Title Hazards?

When starting your search for a new home, it’s important to make sure that the person who owns the property you’re interested in is, in fact, the rightful owner. This issue can be avoided by having your real estate attorney or title company conduct a property title search, to prevent hidden title hazards. These typically take place after there is an agreement between the buyer and seller. It is then the job of a real estate closing agent, whether a real estate attorney or title company, to ensure that the legal paperwork is in order.

The following issues are the most common ones found when conducting a title search:

Boundary Line Issues

This sounds like a relatively small problem, but it has the potential to escalate into a much bigger issue when it comes to selling the property later. This happens when surveys differ over how far the property extends, which is critical for a homeowner to know. Depending on the land, this may need to be settled at local or state levels.

Bankruptcies or Judgments

This can be problematic for a new owner of a property if the judgment remains on the property beyond the original owner. You don’t want to end up owing the money from that judgment, on top of the down payment. It is your closing agent’s job to make sure that any such matters that cloud your title be corrected or removed.

A Newly Discovered Will

This happens more than you think. Every so often, a deceased relative’s will reveals their wishes for the property, which may include keeping it in the family. This obviously disrupts the chain of ownership and will halt the final transaction.

Forged Documents

With so many documents involved in buying and selling homes over many years, there is a possibility that someone may forge critical signatures that can damage the selling process. This practice is obviously illegal but still happens.

Liens Or Debts

Not all sellers are financially stable. If they made renovations or additions to the property that they were not able to pay for, the result is outstanding debts, otherwise called “liens.” That debt can be passed on to the next owner in certain situations. Comprehensive title searches can identify this hidden title hazard before you sign any binding documents.

Clerical Errors in Public Record

The employees who handle public and clerical records are only human, after all. That means they are not exempt from making mistakes every now and then. This could mean filing or listing errors, or errors in paperwork that take more time to correct. In any case, this issue should turn up in a property title search.

Divorce Edicts

A failed marriage can have more than emotional repercussions; there can be financial ones as well if one spouse does not give permission to the other to sell their shared property. Such issues ought to be resolved with their lawyers, but they aren’t always. The process of selling the home can get derailed or halted permanently.

What Is Escrow?

“Escrow” is when a third party temporarily holds money or property until certain conditions, such as mortgage approval or homeowner association approval have been met. These funds protect both buyer and seller during the transaction process.

After you close, if you have a mortgage, your lender may require to have an escrow account with them. Once you start paying your mortgage, the money for taxes and homeowner’s insurance payments will be held in this account and the money paid by you into your escrow account will be used by your lender to pay your taxes and insurance.

Choosing The Title Company

The title insurance company that works with you will have a major effect on your closing experience. The perfect company will ensure:

• A positive experience
• No delays in closing
• No title issues following closing
• Surety that your home is secure

Many homebuyers don’t realize how valuable the right title insurance company will be for your closing experience. An attorney owned and operated title company gives you the added assurance, that if a legal problem arises during the title examination or closing process, you will have an attorney make you aware of the problem and how it should be handled.

Title Transfers

A title transfer refers to the transfer of ownership of a property’s title.

Title Insurance: Transferable Or Not?

Title insurance is not transferable, even when the property changes ownership. A new policy needs to be set up for every new owner.

Transferring Titles

In Florida, transferring a title is a straight forward process if the title has no claims or judgments against the property or the owners and therefore is unencumbered. You can make use of a Quitclaim Deed to transfer a title to the new owner of the property, but we suggest using a Warranty Deed and title insurance to protect yourself from any liens, claims, title fraud, and unauthorized title transfers.

The Cost Of Title Transfer

One cost associated with title transfer is that for documentary tax stamp rates. This cost forms part of the total closing costs. Excluding the Miami-Dade County, all states of Florida have the same documentary tax stamp rate of $0.70 per $100 of the deed’s consideration, which is the property’s purchase price. In Miami-Dade the rate is slightly lower at $0.60 per $100 of the deed’s consideration.

Can I Buy Title Insurance After Closing?

Although it’s generally recommended to purchase title insurance before closing, it is possible to buy it after closing as well.

Purchasing title insurance before closing allows the buyer to have the insurance in place from the moment they take ownership of the property. Having title insurance in place before closing can give buyers peace of mind and protection against unforeseen issues that may arise in the future. Additionally, purchasing title insurance before closing can often be more cost-effective than waiting until after closing.

Purchasing title insurance after closing can benefit buyers who may have been unaware of the importance of title insurance during the initial closing process. While purchasing title insurance after closing may be more expensive, it’s still a viable option for buyers who want to protect their investment in the property.

Closing The Deal

Sometimes called settlement, closing refers to the moment all documents are signed and the title, and keys, are officially transferred to the buyer.

Closing costs consist of fees relating to:

• Attorney hire
• Closing
• Loan points
• Down payment balance
• Property taxes
• Recording
• Surveying
• And more

At closing, all financial issues (called closing costs) are resolved, money is sent to the seller, and all-important documents are filed in public records. Once you have made it through closing, you will be the proud new owner of the property.

Title Insurance and Closing With the Law Offices of Gary I. Handin, P.A.

Purchasing your own home is one of the biggest investments you will make. It is important to us that you are protected while making this investment, and with the expert knowledge possessed by the team at Handin Law, you are sure to have a smooth, professional closing experience.

Gary I. Handin, P.A., and his attorney owned title company, Florida Home Title Company, specialize in title insurance and other real estate concerns. Serving Florida residents, we have helped many Floridians on the exciting but occasionally overwhelming journey of home ownership. Our friendly, knowledgeable staff is here to help answer your questions and represent your interests with professionalism and compassion.

Contact us today at 954-796-9600 for legal services you can count on since 1969.