Buyer’s Guide to Title Insurance

In every real estate transaction, the matter of title insurance arises. A policy of title insurance is issued to a buyer and/or a lender to guarantee to the insured party or parties, “Free and Clear” title to the property being insured, from the beginning of time until the date and time the buyer acquires title to the property, or in the case of a lender’s policy until the date and time the lender’s loan document is recorded against the property. “Free and Clear” is defined as there being no loans, liens, encumbrances, back taxes, easements or covenants, conditions or restrictions against the property that were not disclosed on Schedule ‘B’ of the commitment for title insurance issued by the insuring company. The policy is issued for a one-time fee and will remain in effect as long as you or your heirs retain an interest in the properly. This protects the buyer’s or the lender’s investment in real estate, including their legal defense against any claim or claimant. If a claim is valid, the title insurer will either resolve the title problem or pay the insured’s losses.

Why You’re At Risk

There are many title issues that can arise to cause the loss of your property or your mortgage investment. Title issues not disclosed by a most careful search of the public records, called hidden risks, are the most dangerous. Because of them, your title may be worthless. Your attorney’s examination may be the finest that skill, experience and legal knowledge can produce, but your title may be fatally defective. Here are some title issues that frequently occur. You may not discover them when you buy real estate, but months or years later they can result in the loss of your property or an expensive lawsuit.

  • Deeds by foreign parties
  • Deeds by minors
  • Deeds by persons of unsound mind
  • Deeds to or from defunct corporations
  • Defective acknowledgements (notary)
  • Discovery or will of apparent intestate
  • Duress in execution of instruments
  • Erroneous reports furnished by tax officials
  • False personation of the true owner of the land
  • Forged deeds, releases, etc.
  • Misrepresentation of wills
  • Mistakes in recording legal documents
  • Surviving children omitted from will
  • Administration of estate of persons absent but not deceased
  • Birth or adoption of children after date of will
  • Claims of creditors against property sold by heirs or devisees
  • Deed of community property recited to be separate property
  • Deeds by persons supposedly single, but secretly married
  • Deeds delivered after death of grantor/grantee, without consent of grantor
  • Deeds in lieu of foreclosure given under duress
  • Marital rights of spouse purportedly, but not legally, divorced
  • Ultra vires deed given under false corporate resolution

The above information was provided all or in part courtesy of Capital Title Agency.

 


Randi Christel, Realtor
HomeSmart
Email: Randi Christel
Tel: 602-230-7600
Fax: 866-212-8838
Cell: 602-370-2396

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