When purchasing real estate, clear title to the property is critical, because clear title is evidence of lawful ownership. When the sale of property occurs, it extinguishes the property rights of any prior owners or parties of interest. When the sale of tax-distressed property occurs, because the sale takes place on behalf of government, any person having a publicly recorded interest in the property must be identified, located and notified prior to the sale and the transferring of the property rights to a new purchaser. The list of interested parties requiring curative work in such instances includes lienholders, mortgage holders, governmental bodies, contractors, judgment creditors, the IRS, and the property owner or his heirs at the time the taxing authority originally took custody of the property for non-payment of taxes.
Due to the need for extreme care when dealing with sales of tax-distressed real property by government, title insurance is only issued after an exhaustive examination of the public record is completed, all partied are identified and notice is sent advising interested parties of the rights intended to be terminated by the forthcoming sale. In addition to publically recorded encumbrances on property, other issues affecting title may exist that cannot be identified or disclosed in a search, such as past instances of fraud in the chain of title. However, title insurance provides protection that acts as an indemnity contract that reimburses losses if claims are asserted against covered property for the duration of the policy.
A title insurance policy insures your ownership rights to the property, and the best part is, you only pay for this once at closing and the coverage will last as long as you or your heirs own the property.
Protecting Your Real Estate Investment
Over half of all real estate transactions have a problem somewhere in the chain of title. We uncover these issues and assist in taking corrective action to clear the title and to enable the real estate transfer, so that our clients have peace of mind about their property investment.
Valuable Protection for Your Real Estate Investment
Title insurance protects a policyholder against challenges to rightful ownership of property, which may arise from circumstances of past ownerships. Each past owner brings the possibility of title defects to the property, because of liens, fraud, or improperly executed documents from a previous sale. Title insurance will pay to defend any lawsuit challenging your title as insured and will either correct issues or pay associated losses.
Differences in Title Insurance and Homeowners Insurance
People have the future in mind when investing in real estate, and they purchase homeowners’ insurance to help protect that future. There is a need to protect the property against the past, as well. While homeowners’ insurance provides coverage that focuses on possible future events, title insurance protects against loss arising from past defects in the title to a property. Examples of such defects include unpaid liens, instances of fraud during a sale, or improperly executed documents from a previous title transfer.
Title insurance policies insure against events that occurred in the past of the real estate property, and for a one-time premium paid at closing, coverage lasts as long as you or your heirs own the property.