Why do I need title insurance?

A real estate purchase is usually one of the best investments you can make. A home is probably the largest single purchase you will make.

You protect your property against fire and other casuality damage with homeowner's hazard insurance, but what about protecting your title - your right of ownership?

Title problems are defects that occur before the date of the policy and remain undisclosed until sometime later. Even the most thorough and accurate search of the public records cannot reveal these "hidden" hazards which could delay the sale of your property, make it unmarketable or even cause you to lose your property.

Title insurance covers defects in the title prior to when you purchased your property.

Length of Policy

How long is my title policy good for?

The Owner Policy is valid for the time your policy was issued until you choose to sell (transfer deed) your property - be that one year or twenty years of ownership.

The Lender Policy is valid through the life of the loan. A Lender's Policy may be passed to another lender/mortgagee through an assigment of the loan, however, is not assignable should you refinance the property. A new Lender Policy would be issued at that time.

An Owner (or Fee) Policy is non-transferrable.

The new owner will be required by his/her lender to purchase a new policy and at that time, the new owner may elect to insure the property with a new policy issued in her/his name.

Owner Policy

Why do I need another policy if I provided one for the loan?

You are not insured by your Lender's Policy.

A one-time premium protects your property from actual loss resulting from any risk covered by your policy, up to the amount of the policy.

Your Fee or Owner Policy may also provide for legal defense costs should a claim arise, unless specifically excluded from your policy.

Typically, the Lender and the Owner Policies are issued at the same time to reduce your title policy costs.

An Owner's Policy may also be issued on a property where no lender is involved as protection for the new owner of the property against possible claims.

Also, a current owner may upgrade the amount of a title policy on a property should it increase significantly in value due to improvements (such as building on a vacant lot or an addition to an existing structure.)

What is a Lender's policy?

Your lender knows that title problems can occur more often than you think. Most lenders require title insurance to protect their interests in the property.

You are not insured by the Lender Policy.

Closing Fees

What are typical charges for title work?

Actual costs vary from state to state however, you can expect any of the following:

One-time premium fee for a Lender's Policy for Life of Loan

One-time premium fee for an Owner or Fee Policy for as long as you own the property

Title Search (comprehensive search of all public records)

Lender Required Endorsements and Closing Service Protection Letter

Closing Settlement Agent Fee

Non-Title Closing Fees

County Recording Fees to Record New Deed and Mortgage

Overnight/Express Mailing

Lender Required Appraisal and/or Survey

Legal Representation/Attorney Fees

What are the problems that could affect my title?

The following are some of the types of title defect that would adversely (negatively) affect your property:

Forged deeds, mortgages, satisfaction or release of mortgages and other instruments

False impersonation of the true owner of the land or his consort

Instruments executed under fabricated or expired power of attorney (death or insanity of principal)

Deed apparently valid but actually delivered after the death of the
Grantor or Grantee, or without the consent of Grantor

Deeds by persons of an unsound mind

Deeds by minors

Deeds not properly delivered

Deeds which appear to convey title but are really mortgages

Outstanding prescriptive rights not of record and not disclosed by survey

Descriptions apparently but not actually adequate

Duress in execution of instruments

Failure to include necessary parties in judicial proceedings

Federal estate and gift tax liens

State inheritance and gift tax liens

Errors in tax records (For example, listing payment against wrong property.)

Ineffective waiver of tax liens by tax or other govern authorities repudiated later by successors

Corporation franchise taxes as lien on all corporate assets, notice of which does not have to be recorded in the local recording office

Erroneous reports furnished by tax officials, but not binding on municipality

Tax homestead exemptions set aside as fraudulently claimed

Lack of capacity of foreign personal representatives and trustees to act

Deeds from non-existent entities

Interests arising by deeds to fictitious characters to conceal illegal activities on the premises

Deeds in lieu of foreclosure set aside as being given under duress

Ulta vires deed given under falsified corporate resolution

Conveyances and proceedings affecting rights of servicemen protected by Soldiers and Sailors Civil Relief Act

Federal condemnation without filing of notice (Federal law does not require filing of notice of taking in local recording office.)

Deed from record owner of land where he has sold property to another purchaser on unrecorded land contract and the purchaser has taken possession of premises

Defective acknowledgment due to lack of authority of notary. (Acknowledgment taken before commission or after the expiation of commission.)

Deed of property recited to be separate property of Grantor which is in fact community or joint property

Lack of a legal right of access to and from the property

Matters affecting title whose origins existed before the period of title examination and which have not prescribed by operation of law

Deeds by persons apparently single but actually married

Deed from bigamous couple-prior existing marriage in another jurisdiction

Undisclosed divorce of spouse who conveys as sole heir of deceased consort

Undisclosed heirs

Misinterpretation of wills, deeds and other instruments

Birth or adoption of children after date of will

Children living at date of will but not mentioned therein

Discovery of will of apparent intestate

Discovery of later will after probate of first will

Administration of estates and probate of wills of persons absent but not deceased

Conveyance by heir, devisee or survivor of a joint estate who murdered the decedent

Deed from trustees of purported business trust which is in fact a partnership or joint stock association

Deed of executor under non-intervention will when order of solvency has been fraudulently procured or entered

Deed to or from corporations before incorporation or after surrender of forfeiture of charter

Claims of creditors against property conveyed by heirs or devisees within prescribed period after owner's death

Mistakes in recording legal documents (For example, incorrect indexing, errors and omissions in transcribing and failure to preserve original instruments.)

Record easement, but erroneous ancient locations of pipe or sewer line that does not allow route of granted easement

Special assessments where they become lien upon passage of resolution and before recordation or commencement of improvements for which assessed

Lack of jurisdiction of person in judicial proceedings

And there are many others...