When you purchase your new home, the title is the document that secures your right of ownership to a property. It grants you the right to occupy your new home, to make improvements, and to enjoy all the benefits of home ownership. Without a title, you have no claim to ownership of property, so your deed is one of the most important documents involved in your new home purchase. When a new homeowner purchases a home or condo, the title is transferred from the names of the old owners to the names of the new owners through a deed. It is important to make sure that your title is “clean” before this happens. A clean title is one where there are no liens on the property, no unpaid taxes, no undisclosed heirs, and no other issues which could impact your use and enjoyment of the property. While a title search reduces the risk that there are issues that could arise, it is still important to protect your interest in your property from the unforeseen. Title insurance is a special type of insurance you will purchase when you purchase a new home that protects you should any issues about your title come to light post-closing which predate the date and time of the recording of your deed.
Like with any legal document, any errors, omissions, or other issues with title can present a problem for a new home owner. Your title company or your real estate attorney order a title search through a title insurance underwriter and will thoroughly review the title report to see that there isn’t an issue which could impact the title to the property. Clerical errors, fraud, or undisclosed heirs can create problems with title to property. If a person claimed to be single but turned out to be married, the person’s spouse could have a claim to the property. A thorough title search can reveal any unpaid taxes, and liens on the property, and other legal issues that can impact the title. Sometimes a title search reveals easements or other restrictions that could potentially limit your use of the property. A title search should catch any red flags, but sometimes not all issues are identified. This is where title insurance comes in. Title insurance is a type of insurance that protects you should any issue with the title arise that predates the date and time of the recording of the deed. So, if an undisclosed heir, a will, or any other problem arises with the title, title insurance should protect you and reimburse you for any lost equity in your property.
What Does a Clean Title Look Like?
When you are purchasing a home or condo, the title should have the name of the owner and information about the property you are buying, like the legal description, the amount of insurance, proposed insured, effective date, and any other descriptive information that may be useful. Before closing, your title lawyer or title company will order a title insurance commitment from a national underwriter to perform what is known as a “title search.” A title search can reveal any problems with the title that is recorded in the public records of the county in which the property is located. Your title insurance lawyer can let you know if there are any issues that come up with the title. After the title search, your real estate lawyer, with the assistance of an underwriter, will issue a title insurance policy. Title insurance is a one-time expense and it will protect you for as long as you own your home. It is recommended that you purchase the most robust title insurance policy available.
Types of Title Insurance
There are different types of title insurance you can purchase. If you have a mortgage, you lender more than likely will you to purchase a title insurance policy to protect the interest of the mortgage. There are two types of title insurance policies. One kind protects you, the home owner, and the other kind protects your bank or lender. There are also different types of endorsements that can be purchased that offer additional title insurance coverage. Most title insurance will protect you if it is revealed that there were unpaid taxes, undisclosed heirs, or if there were clerical errors that create problems with the deed. Other types of title insurance can protect you if it is revealed that easements or other issues restrict your use of the property. Usually title insurance is only a precaution because a well-trained, residential real estate attorney can catch some of the most common issues with a title, like forged documents, situations where individuals said they were single but were still married, wills that show that there are new heirs to the property, and errors with the filing of the document. When purchasing title insurance for your new home, it is wise to understand what is and isn’t covered. If your title search lawyer finds any risks, these may be listed as exceptions on Schedule B-II of your title insurance policy. It is important to pay attention to these exceptions because they can potentially impact the value of your property. Title insurance won’t protect you from unpaid taxes if you owe taxes as the homeowner.
Why Choose a Title Insurance Attorney?
When purchasing your home, you may have many options when selecting who performs your title search and when deciding upon title insurance. While many homeowners go with a title company to perform their title search, you may want to consider hiring a title insurance attorney to assist you with the title search. Why? A title company cannot provide you legal advice while an attorney can provide you legal advice. Choosing a title insurance law firm, like The Law House of Orlando, P.A. provides the added value of having a trained, Florida Bar licensed attorney on your side. You want to find a lawyer who is able to review a title search and explain the legal ramifications of each item listed in the title search.