What is title?
The term “Title” refers to the evidence of a person’s right of ownership of property.
What is a title search?
A title search is an examination of the public records (deeds, mortgages, court records, company records, etc.) which relate to the property to discover any adverse matters or defects contained therein and to verify the property owner’s right to sell or finance the property.
What kind of problems can a title search reveal?
Unsatisfied mortgages, unsatisfied mortgages, judgments against the property owner and conditions and restrictions limiting the use of the property are some issues that a title search can reveal.
Are there any issues a title search may not reveal?
These ‘hidden hazards’ can include a forged will or deed; a signature by a minor or mentally incompetent person; adverse possession; clerical errors in the records; confusion arising from similarity of names; duress; false affidavits; fraud; judgment against a property owner; lawsuits; misfiling of a document by the Registry of Records; sellers who misrepresent their marital status; undisclosed heirs; undiscovered wills; and unreleased mortgages.
What is title insurance?
Title insurance is a policy that indemnifies the buyer or lender against loss or damage arising out of defects or encumbrances upon title to the property that have not been disclosed as exceptions in the policy.
Why do I need title insurance? And how will it protect me if a claim arises?
Title insurance protects against hidden defects in title that may have existed before you purchased your property and which even the most carefully conducted title search could not reveal. Without it, you may be liable for judgments or claims brought against your new property. However, your Owner’s Policy will pay the legal cost of defending all covered claims and, should the claim prove valid, reimburse you for your actual loss up to the face value of the policy.
I have my lawyer’s opinion; why do I need a title insurance policy?
Lawyer’s opinions are generally qualified by exceptions and restrictions, most of which may be covered by title insurance (see 3 and 4 above). Moreover, an attorney may die or cease to practise, or the attorney he or she may not have sufficient indemnity coverage. In any event, a claim made against him will possibly entail lengthy and costly legal proceedings with one attorney suing another – all at the expense of the person claiming to hold the property title. A title insurance policy buys the insured the peace of mind that in the event of a claim upon the title, the responsibility for the defence or establishment of the title is shifted to the insurance company, with the resources and expertise to facilitate a diligent resolution to the title matter, whether by litigation or settlement of the claim with the insured or a third party.
How much does title insurance cost and how often are premiums paid?
The premium is directly related to the value of the property and is payable one time only.
Are there different types of policies?
The Owner’s Policy protects the buyer against title flaws and endures for as long as the individual or his or her heirs have an interest in the property. The Lender’s Policy insures the participating financial institution that in the event of exercising its remedies in a default of the loan it has validly perfected security interest in the property.
If my lender obtains title insurance, why do I need my own policy?
The Lender’s Policy only covers the amount of its unpaid principal balance on the loan, which might not be the full value of the property, and only defends the lender in the event of a lawsuit challenging the title to the property. In many cases, a lender will only have a loss that requires the company to act if the lender is exercising its default remedies. However, the obligations on the insurance company to act on behalf of a property owner are much broader and run to the direct benefit of the owner.
|
