Title Insurance
Any real estate purchase is not an actual purchase of land and home but an acquisition of a title to it. This title may be limited by existing liens on the property, easements that had been granted, or other rights and claims reserved by others. In contrast to other kinds of insurance focusing on possible events occurring in the future and charging an annual premium, title insurance focuses on past events, i.e. risk and defects that already exist in the title to the land you are about to purchase, and there is only a one-time premium to be paid for title insurance coverage.
There are two different kinds of title insurance:
· Owners and purchasers
· Lenders or mortgagees
The owner’s title insurance lasts as long as owner or heirs of the property have any interest in it, even after the property is sold.
The lender’s title insurance serves as a security of the lender’s investment in the property, similar to the lender demanding car insurance for their car loan.
Why Title Insurance?
There are few things in life more important than protecting your home. The following matters are examples of why you need a title insurance policy. Remember that the best title examination or search cannot protect your equity and home from matters not appearing in the public records.
However, a title policy (subject to certain limitations set forth in the policy) can protect you from:
1) Documents executed under false, revoked or expired powers of attorney.
2) False impersonation of the true landowner.
3) Undisclosed heirs.
4) Prescriptive rights in another not appearing of record and not disclosed by survey.
5) Improperly recorded legal documents.
6) Forged deeds, mortgages, wills, releases of mortgages and other instruments.
7) Deeds which appear to be absolute, but which are held to be equitable mortgages.
8) Conveyances by undisclosed divorced spouses.
9) Failure to include necessary parties to certain judicial proceedings.
10) Defective acknowledgments due to improper or expired notarization.
11) Gaps in the chain of title.
12) Deeds by minors.
13) Deeds and wills by persons lacking legal capacity.
14) State inheritance and gift tax liens.
15) Errors in tax records.
16) Administration of estates and probate of wills of missing persons who are presumed deceased.
17) Deeds and mortgages by foreigners who may lack legal capacity to hold title.
18) Issues involving improper marital status.
19) Improper modification of documents.
20) Rights of divorced parties.
21) Conveyances in violation of public policy.
22) Forfeitures of real property due to criminal acts.
23) Interests arising by deeds of fictitious parties.
24) Adverse possession.
25) False affidavits of death or heirship.
26) Federal, estate and gift tax liens.
27) Special tax assessments.