Hi all! I am here to help you better understand Title Insurance, its uses, and why it is a necessary part of any real estate transaction. Title Insurance guarantees that the purchaser of the property is getting clean title to property.
What is “clean title” you ask? It means that you have 100% ownership of the property; in other words, no one else can claim to have “better” title than you by having any interest in the property. Typically, the seller in a real estate transaction pays for the Title Insurance, although if you are using a loan to buy the property your lender may require you to purchase a separate policy on behalf of the bank. Your real estate attorney can help you navigate this process.
Title Insurance is there to protect you against anyone who might come along and claim to have some interest in the property after you have purchased it. It is essentially assurance that you are receiving 100% interest in the specific property. For example, after you buy the property, someone could make a claim against you for something like a lien that was not properly recorded or a mortgage that was missed in a title search. Perhaps an heir of someone who owned the property before you claims they are the rightful owner; Title Insurance should protect you from that.
Another troublesome situation could be where a prior owner of the property issued a deed to a third party that was never recorded. A situation like that would definitely be considered a “cloud” on the title because it was never recorded, and therefore no one has any way of knowing about it. If that third party comes to you after you own the property claiming that they are the true owner, title insurance will protect against that claim.
An important lesson to learn is to not assume anything when purchasing real estate. However, often we tend to assume the person selling property has the right to do so. A Title Insurance company will work with the property seller’s attorney to establish that the seller is the rightful owner before they sell you the property.
If you have questions about Title Insurance and the best ways to go about real estate resolutions, please feel free to reach out to me and connect. I am here to help!
Junilla J. Sledziewski, ESQ.
These materials have been prepared by Kershner Sledziewski Law, LLC for informational purposes only and are not legal advice. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. Internet subscribers and online readers should not act upon this information without seeking professional counsel, as the advice appropriate for your particular circumstances may vary.