Finally after years of earning and saving money, you are the proud owner of a house. Bargaining with the seller was a breeze. Everything is perfect, you tell yourself during the housewarming party you throw. Then, a court order asking you to vacate the property comes along, to turn the dream into a nightmare. Turns out your new house is tied up in an old legal case.
Many property owners end up in such unforeseen legal battles because they were either unaware about property title insurance or chose to ignore it.
What is Property Title Insurance?
It is a property owner’s insurance cover for loss incurred from title defects, which include outstanding property taxes from previous owners, forged or invalid title documents, lack of access to the property, heirs who have a valid claim to the property but haven’t come forward, and other factors that come into light after the property has been bought.
With properties changing hands quickly, buyers tend to overlook crucial details. This can lead to problems later on, involving court settlements, legal fees, and, in some cases, losing the property. Taking this type of insurance will help you avoid such problems.
The Process of Obtaining a Title Insurance
When a title insurance is taken on a property, a title search is carried out before purchase. An experienced property attorney or a title insurance company representative usually undertakes the search. They perform thorough checks on documents filed at the local land records office, to make sure the property has no existing title defects like liens, property taxes, pending mortgage, prior property transaction defects, and other issues that threaten the ownership of the insured parties.
If the property passes this check, the insurance is granted, and the property can then be purchased. The responsibility of having conducted a thorough property search now falls with the insurance company. After the insurance has been granted, any loss incurred defending the title will be handled by the firm. The insurer will not only cover your legal fees, but also reimburse the amount you invested in the property in case of it being seized.
Choosing the Right Insurance Firm
Insurance rates vary from one firm to another. Search and compare different policies offered to get the best deals on your property.
When you select a firm, make sure you begin by talking to some of their clients. Do your homework. Gather information regarding the policies offered. Some firms offer discounts in certain cases. Find out if you are eligible for them. Information regarding how the firm solves their title disputes, and their rate of success will help you in making up your mind.
Another thing to do when purchasing this type of insurance is to make sure you understand what the policy offers. If you aren’t familiar with the legal side of the process, getting a trusted lawyer to check the document is advisable before signing it.
With property scams increasing by the day, title insurance on your property will give you peace of mind. Plus, if the ownership is challenged someday, having your property title insured will not leave you battling in court.