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The word title is a collective term for all your legal rights to own, use and dispose of land. Title includes all previous ownership, uses, and transfers. To legally transfer real estate property, a title search must be performed and, in most cases, the title must be found free of any circumstances that could endanger your right of ownership. Title insurance protects against the possibility of future loss should your legal rights to your property be challenged.
To the Purchaser...
The purchaser of real estate needs protection against serious financial loss due to a defect in the title to property purchased. For a single one-time premium, which is a modest amount in relationship to the value of the property, a buyer can receive the protection of a title insurance policy - a policy that is back by the reserves and solvency of the title insurer. A title insurance policy will cover both the claims arising out of title problems that could have been discovered in the public records, and those so-called “Non-Record” defects that could not be discovered in the record, even with the most complete search. (What is a title search) A title insurance policy will not only protect the insured owner, but also that person's heirs for as long as they hold title to the property, and even after they sell the property by warranty deed. The title insurer will not only satisfy an valid claim made against the insured's title, but will pay for the costs and legal expenses of defending against a title claim.
To the Lender...
The overwhelming majority of mortgage loans made in the United States are made by persons who are acting in a fiduciary capacity - by savings and loan associations, savings banks, and commercial banks on behalf of their depositors, and by life insurance companies on behalf of their policy holders. Because they are lending others people's money
An owner of real property whose interest is insured by an owner's title insurance policy has the assurance that the title will be marketable when selling the property. The title insurance policy protects the seller from financial damage if the seller's title is rejected by a prospective purchaser. Also, wen the seller conveys with “warranties,” the seller is still protected if the buyer sues because of a breach of those warranties.
To the Real Estate Attorney...
Title insurance enables the real estate attorney to provide the client with substantially greater protection tan would be afforded by the attorney's opinion along. The attorney's opinion is generally limited to recorded matters and the client can only recover from the attorney if the attorney if found to be negligent.
To the Real Estate Broker...
The title insurance company and the real estate agent both seek to ensure that as many purchases as possible are closed to the satisfaction of all the principals in the transaction. From the broker's standpoint, the efficient and safe transfer of title will result in client satisfaction, increased prestige, and continued business.
Apart from the security that title insurance offers, most brokers have experienced numerous instances in which title insurance personnel have enabled them to close transactions that otherwise would have been delayed. By helping to avoid delays, the title insurer is able to facilitate te job of the real estate broker and to minimize the inconveniences and costs to the home buyer.
To the Home Builder...
By providing various title insurance services and information to the home builder, the title insurance industry can and does assist the builder in identifying and evaluating building and use restrictions, easements, etc., in removing title problems that may arise, and in facilitating prompt and needed disbursement of construction funds from the construction lender. All of these services ultimately rebound to the benefit of the buyers of newly constructed homes.
To the Community in General...
Apart from the unique benefits title insurance offers to particular parties interested in a real estate transaction, title insurance companies can and do offer considerable assistance to public officials through the use of their “title plants” - the data banks of reorganized and indexed public records that are maintained by the title insurer in many areas of the country.
Much of the information contained in title plants is not readily available from other sources. This fund of information about the date of recent sales, representative sale prices, ownerships, area maps, use restrictions, surrounding properties, and a host of other matters pertinent to proposed projects, has helped representatives from all levels of government save countless hours ans taxpayer dollars. In addition, title plant people frequently help recording officers correct errors they discover in public indices and records.
It's a detailed examination of all available public records on a property to verify the seller's right to transfer ownership or a borrower's right to encumber and to uncover any potential challenges you might face.
A title search should reveal such thinks as unpaid taxes, unsatisfied mortgages, judgments against the seller, and restrictions limiting the use of the land. However, even the most diligent search may fail to reveal some hidden hazards, such as those mentioned earlier. That's where title insurance come in.
A lender's policy lasts until the mortgage is paid in full. An owner's policy remain in force as long as you or your heirs have an interest in the property. If challenges to title arise after the property has passed to your heirs, the title insurance company would defend the title for them just as it would for you. |
