WHY DO YOU NEED TITLE INSURANCE?
Its all about history when it comes to your property. A through title search can help you uncover any title defects in your property, any outstanding liens, and provides you the protection you need to defend against any claims by others against your property.
Here is a list of reasons for needing title insurance
- Errors in Public Records: Clerical or filing errors could affect the deed or survey of your property and cause undo financial strain in order to resolve them. An improperly recorded deed can affect your ownership.
- Unknown liens: Prior owners of your property may not have been meticulous bookkeepers — or bill payers. And even though the former debt is not your own, banks or other financing companies can place liens on your property for unpaid debts even after you have closed on the sale. This is an especially worrisome issue with distressed properties.
- Illegal Deeds: While the chain of title on your property may appear perfectly sound, it’s possible that a prior deed was made by an undocumented immigrant, a minor, a person of unsound mind, or one who is reported single but in actuality married. These instances may affect the enforceability of prior deeds, affecting prior (and possibly present) ownership.
- Missing Heirs: When a person dies, the ownership of his home may fall to his heirs, or those named within his will. However, those heirs are sometimes missing or unknown at the time of death. Other times, family members may contest the will for their own property rights. These scenarios — which can happen long after you have purchased the property — could affect your rights to the property.
- Forgeries: Unfortunately, we don’t live in a completely honest world. Sometimes forged or fabricated documents that affect property ownership are filed within public records, obscuring the rightful ownership of the property. Once these forgeries come to light, your rights to your home may be in jeopardy.
- Unknown encumbrances or easements: At the time of purchase, you may not know that a third party holds a claim to all or part of your property — due to a former mortgage or lien, or non-financial claims, like restrictions or covenants limiting the use of your property. You may own your new home and its surrounding land, but an unknown easement may prohibit you from using it as you’d like, or could allow government agencies, businesses, or other parties to access all or portions of your property. While usually non-financial issues, easements can still affect your right to enjoy your property.
- Boundary/survey disputes: You may have seen several surveys of your property prior to purchasing, however, other surveys may exist that show differing boundaries. Therefore, a neighbor or other party may be able to claim ownership to a portion of your property.
- Unresolved Foreclosures: You may not be aware or may even understand if all the outstanding interests were resolved in a foreclosure action. If an interest was not addressed, your ownership right is not seasoned. You could be facing a stronger claim to ownership by a party that was not foreclosed on properly.