Why Do You Need Title Insurance?


When buying real-estate, the Buyer presumes that the Seller has the right to sell the property without any disputes. However, in the United States, although local governments record real-estate title, or ownership documents, they do NOT guarantee accuracy; thus the Buyer takes the risk if there’s any problem.

So, whenever you decide to purchase real estate, assume a loan or refinance your existing loan, you will need a complete search and title examination performed on the property. Otherwise, you may later discover that the property you bought isn’t yours after all!

We have had transactions in which during a title search, it was discovered that the property had violations, liens, or mortgages that were not disclosed, and exceeded the value of the property.
 
Title insurance gives you protection if someone makes a claim on your property. There may be unpaid taxes, lien claims, IRS liens, building and zoning violations, or mortgages or leaseholder rights. There could be lawsuits recorded against the property itself.

  • What does a Title Company do?
    Ponce de Leon Title Services provide three main services:

    • Comprehensive search and due diligence to identify any issues with the title

    • Insurance that covers any hidden issues

    • Managing the closing process

  • How does the Title Insurance Policy protect me from these problems?
    It eliminates the risk of loss to you resulting from claims against the title. Up to the policy amount, the insuring company will defend you in a lawsuit attacking the title, and will either correct the title problem or pay your losses.
  • What kinds of Title Insurance policies are available?
    There are two separate types of insurances issued:
    An Owner’s policy that protects the buyer
    A Lender’s policy, required by almost all lenders to protect them
    Lenders know that many things can cause problems with a title or that defending an attack can be very expensive. The Owner’s policy provides the same protection for the Buyer’s equity for a one-time premium that covers you as long as you or your heirs own the property.
  • What kinds of title problems can arise?
    Here are just a few of the most common hidden risks that can cause loss of title:

    • Clerical errors in recording legal documents

    • Fraud in connection with the execution of documents

    • Inadequate surveys
    • Incorrect indexing
    • Incorrect legal descriptions
    • Deeds executed under expired or false power of attorneys
    • Delivery of deeds after the death of a grantor
    • Deeds by minors
    • Deeds by persons of unsound mind
    • Forged deeds, releases or wills
    • Impersonation of the owner of the property
    • Misinterpretations of wills or trusts
    • Incorrect representation of marital status of grantors
    • Birth of heirs subsequent to the date of the will
    • Instruments executed under invalid or expired power of attorney
    • Spousal rights of ex-spouse or former owners
    • Confusion due to similar or identical names
    • Liens for unpaid estate, inheritance, income or gift taxes
    • Mental incompetence of grantors
    • Mistakes in recording legal documents
    • No-delivery of deeds
    • Undisclosed or missing heirs
    • Undue influence on a grantor or executor
    • Unsatisfied claims not shown on the record
    • Will not properly probated