A title policy is something every title insurance attorney is familiar with. However, the concept can be strange to those who haven’t spent years studying about it. Title insurance protects both the future homeowner and even the seller from any defects in the title. This means that if there is anything wrong with the title of the property, neither party will suffer financial loss.
In essence, it is a form of insurance that protects homebuyers from any defects in the title associated with that specific property. While you will pay a once-off insurance premium, it is important to know the property that you’re purchasing has no defects associated with the title of the property. Any defects can impact your ability to own and/or use the property as intended and can cause severe financial loss for you.
How Do Bad Titles Occur?
Bad titles or defects in a title occur when taxes, liens, or even disputes against the ownership of the property occur. Keep in mind that property ownership disputes are generally due to someone contesting the will of the deceased. An owner’s title insurance policy will ensure that you have better title to the property than anyone else in the world, free of all claims except for the mortgage that you may place on it or any other liens that you may create and therefore be aware of
Why Should You Get Title Insurance?
When purchasing a home, you do all the necessary research to ensure it is the perfect fit for your needs. By having a title search done by a real estate attorney or a title insurance company, you can protect yourself against various home title hazards. This ensures that you don’t suffer any avoidable financial losses due to liens, claims, or disputes regarding title to your property. While your normal homeowner’s insurance safeguards you against future events, it doesn’t take into account past events that could cause you immense financial strain.
What Does A Title Policy Cover?
A basic policy will cover you against various title hazards including but not limited to:
- Ownership disputes: Where a third-party claims to own the home you’re attempting to purchase from the registered seller.
- Fraud: If fraudulent activity occurs, such as false signatures or forgery.
- Covenants on the property: This includes all restrictive terms which could impact your use of your property, including unrecorded easements. An easement is the right that someone else has to use a part of your property, an unrecorded easement is an off the record verbal agreement previous homeowners may have had that has continued to a point where both parties may have forgotten who actually owns that portion of the property.
- Lawsuits & Liens: If there are any outstanding judgments on the property, your title insurance will cover you to ensure you are not the one burdened with unnecessary legal fees.
The Different Types Of Title Policies
There are two forms of title insurance, one for lenders and the other for owners.
This means that if you are purchasing a new home, your lender will require that you purchase a title insurance policy. This is to protect your lender or bank on the off chance you were not able to have the ownership title of the home legally transferred into your name. This protects them and you against any financial loss. However, there are instances where even though lenders insurance has been taken out, you may still be at risk. This is where the second type of title policy’s comes into play.
Owners title policies are generally taken out by the purchaser of the home, to protect the buyer against any bad titles. In some counties in Florida the seller obtains the owner’s title insurance policy for the buyer. However, in some counties it is just the opposite. Keep in mind that this is not a set standard, but you can come to an agreement with the seller to get the owners insurance to ensure you’re fully protected.
Title Policy Experts In Coral Springs
If you have any questions or concerns or if you would like to speak to a real estate attorney who writes title insurance or a title insurance company regarding the different types of title policies. Look no further than the law offices of Gary I. Handin, P.A. We also own and operate Florida Home Title Company. Our team has decades of experience successfully helping people just like you! Call us today 1-877-815-4560 or 954-796-5035.