title to a property is the elemental foundation of ownership;
essentially, it is the property owner's right to possess and
use the property.
Title companies perform an extensive search and examination of historical records which are obtained from court records, property and name indexes to verity the seller's right to transfer ownership. The purpose of all this research is to discover claims, defects and/or other rights or "clouds" against the chain of title.
Your Lender Requires It... Shouldn't You? If you are purchasing
real estate and obtaining a mortgage to finance the purchase,
your lender will require you to purchase a Loan Title
Insurance Policy to cover their interest in your property
and to safeguard first position as a lien holder on your property.
An Owners Policy of Title Insurance is a policy offered by
the title company to you as the purchaser at the closing.
An Owners Policy is your assurance of protection against loss
if a title defect is ever discovered and a claim filed against
Without the protection of an Owners Policy, you may be in
jeopardy of losing your investment. When purchasing your home,
you are making the largest investment in your life. Even the
best title examination or search cannot protect your investment
and home from matters not appearing in the public records,
However, an Owner's Title Insurance Policy* can protect you
- Forged legal instruments (deeds, mortgages, wills, releases of mortgages)
- Legal documents improperly recorded
- Breaks in the chain of title
- Mistakes and omissions due to improper abstracting
- Inadequate legal descriptions
- False impersonation of the true property owner
- Undisclosed heirs
- Defective notary acknowledgements
- Issues involving improper marital status
- Adverse possession
- Utility easements
- Documents executed under false or expired powers of attorney
- Prescriptive rights in another not appearing of record and not disclosed by survey
- Deeds by minors
- Deeds and wills drafted by persons lacking legal capacity
- Errors in tax records
- Persons under duress while executing instruments to convey or establish title
- Conveyance by undisclosed spouses
- Real estate homestead exceptions
- Interests arising by deeds of fictitious parties
- Community issues regarding property
- Falsification of affidavits or heirship
- Matters regarding probate
- Misinterpretation of wills and other legal documents
- Issues of rightful possession of land
- Forfeitures of property due to criminal acts
- Improper modification of documents
- Deeds/Mortgages by foreigners who may lack legal capacity to hold title
- Rightful conveyances by corporate entities
- Issues involving the delivery of conveyance instruments
Fictional Example: Jack and Jilla lovely couple. They made quite an impression on the Johnsons who purchased their home. The Johnsons were much less impressed when they heard from Jack's real wife. It seems that Jill wasn't Jack's wife but his mistress, which meant that the deed of ownership she signed was invalid. The Johnsons did finally meet Jack's legitimate wifein a court of law when she claimed her legal right to the property.
Fictional Example: A widow has seven sons. One of her sons is presumed lost at sea and declared legally dead. Upon the widow's death, the remaining sons inherit her home, place it on the market, and sell it for a modest price to the Andersons. The Andersons were delighted with their new homeuntil the son lost at sea returned from the dead. It turns out the widow's missing son decided years ago to start a new life elsewhere. When he finally returned and found that the house had been sold, he promptly filed claim against the Andersons for his rightful share of the property.
If a claim is ever filed against your property, title insurance will, in accordance with the terms of your policy, assure you of legal defense and pay all court costs and related fees. If the claim is found to be valid, you will be reimbursed for your actual loss up to the face amount of the policy.
The insurance premium for an Owners Policy is collected only once (usually at a discounted rate if written at the same time as the Lender Policy) and your coverage will remain consistent for as long as you or your heirs retain an interest in your property.