A: A Title is the foundation of property ownership. It is the owner’s right to possess and use the property.
A: A Title Search is a detailed examination of the historical records concerning a property. These records include deeds, court records, property and name indexes, and many other documents. The purpose of the search is to verify the seller’s right to transfer ownership, and to discover any claims, defects and other rights or burdens on the property.
A: A Title Search can show a number of title defects and liens, as well as other encumbrances and restrictions. Among these are unpaid taxes, unsatisfied mortgages, judgments against the Seller and restrictions limiting the use of the land.
A: Yes. There are some “hidden hazards” that even the most diligent title search may never reveal. For instance, the previous owner could have incorrectly stated his marital status, resulting in a possible claim by his legal spouse. Other “hidden hazards” include fraud and forgery, defective deeds, mental incompetence, confusion due to similar or identical names, and clerical errors in the records. These defects can arise after you’ve purchased your home and can jeopardize your right to ownership.
A: Title Insurance is your policy of protection against loss if any of these problems even a “hidden hazard” results in a claim against your ownership.
A: If a claim is made against your property. Title Insurance will, in accordance with the terms of your policy, assure you of a legal defense and pay all court costs and related fees. Also, if the claim proves valid, you will be reimbursed for your actual loss up to the face amount of the policy.
A: Maybe and maybe not. An abstract is a history of the property title as revealed by the public records. Abstracts may contain errors and do not disclose “hidden hazards” that can threaten your property title if you do not have a Title Insurance Policy.
A: An Attorney’s opinion is based on a search of the public records. So, once again, even the most exhaustive search of these records may not reveal everything. Unlike a Title Insurance Company, an Attorney is not liable if you should suffer loss because of “hidden hazards” in the title.
A: Because the owner could, in a very short time, do many things to encumber the title. For example, he could grant easements or construct improvements that encroach on adjacent property. He could get married or divorced, or have a lien filed against the property. It is necessary to conduct an up-to-date title search to uncover any such problems.
A: A Title Policy insuring the builder does not protect you. Also, a great many things could have happened to the land since the builder’s policy was issued. Liens, judgments, and unpaid taxes for which prior owners were responsible may be disclosed after you purchase the property -causing you aggravation and costing you money.
A : Yes. Basically there are two different types of policies a Lender’s Policy and an Owner’s Policy. The Lender’s Policy protects the Lender’s interest in the property as security for the outstanding balance under the Buyer’s mortgage. The Owner’s Policy safeguards the Buyer’s investment or equity in the property up to the face amount of the policy. (Title insurers in many states offer increased policy coverage through inflation endorsements to cover increases in value due to inflation.)
A: From any licensed Title Insurance Company or its representative operating in your state. When choosing a title insurer, it is important that you look for a company with expertise and experience, as well as the financial strength to protect you should a claim arise. Your Broker or Attorney can recommend such a company.