FAQ's

WHAT IS A TITLE?

A title is the foundation of property ownership. It is the owner's right to possess and use the property.

WHAT IS A TITLE SEARCH?

A title search is a detailed examination of the historical records concerning a property. These records include deed records, property and name indexes, and many other documents. The purpose of the search is to verify the title to transfer ownership, and to discover any claims, defect and other rights or burdens on the property. First, a service known as a title search describes the condition and quality of the title to the land you are buying. Your title insurance protects you against mistakes or threats that might otherwise result in financial loss to you for those hidden, unknown items. Your title insurance protection is a permanent assurance that your ownership and use will be defended promptly for claims at no cost to you, whether the claim is valid or not.

WHAT IS TITLE INSURANCE?

Title insurance provides coverage for certain losses due to defects in the title that occurred prior to your ownership. The seller can give you only those rights that have been previously received by him/her with good title. Title insurance protects against such prior fraud or forgery that might go undetected until after closing and possibly jeopardize your ownership and investment.

WHY DO I NEED TITLE INSURANCE?

When you buy a home, or any property for that matter, you expect to enjoy certain benefits from ownership. For example, you expect to be able to occupy and use the property as you wish, to be free from debts or obligations not created or agreed to by you, and to be able to freely sell or pledge your property as security for a loan. Title insurance is designed to cover these rights you bargain for.

WHAT DOES IT COST?

The cost varies, depending mainly on the value of your property. The important thing to remember is that you pay only once for an owner's policy, then the coverage continues in effect for as long as there is no change in ownership. If you should die, the coverage automatically continues for the benefit of your heirs. Likewise, if a buyer gives you a mortgage to finance a purchase of covered property from you, your coverage continues to protect your security interest in the property.

HOW LONG DOES MY COVERAGE LAST?

For as long as you or your heirs retain an interest in the property and, in some cases, even beyond.

IS THERE MORE THAN ONE TYPE OF INSURANCE?

There are basically two different levels of coverage: Standard coverage, and Extended coverage.

Standard coverage handles such risks as:
• 1. Forgery and impersonation
• 2. Lack of competency, capacity or legal authority of a party
• 3. Deed not joined in by a necessary party (co-owner, heir, spouse, corporate officer, or business partner)
• 4. Undisclosed (but recorded) prior mortgage or lien
• 5. Undisclosed (but recorded) easement or use restriction
• 6. Erroneous or inadequate legal description
• 7. Lack of a right of access
• 8. Deed not properly recorded

Extended coverage policy may be requested to protect against such additional defects as:
• 1. Off-record matters, such as claims for adverse possession or perscriptive easement
• 2. Deed to land with buildings encroaching on land of another
• 3. Incorrect survey
• 4. Silent (off record) liens (such as; mechanics' or estate tax liens)
• 5. Pre-existing violations of subdivision laws or zoning ordinances

IS TITLE INSURANCE JUST LIKE OTHER INSURANCE?

No, title insurance is unique in that liability under it ends where liability under other forms of insurance begins. Title insurance insures against the results, acts and defects of the past, whereas other types of insurance protect against happenings or losses in the future. For instance:

• 1. A title insurance policy issued today insures the holder against defects of the past, occurring prior to the date of the issuance that may affect the title. The title policy does not insure against defects originating at a later date.
• 2. Fire insurance, life insurance, accident insurance, etc. protect against happenings in the future.

CAN ONE GET TITLE INSURANCE ON ANY PROPERTY?

No, title insurance is not intended for titles known to be bad or defective. A title company would not write a title policy when there is a known serious defect, any more that a life insurance company would write a life insurance policy for an applicant whom a doctor reports to be seriously ill.

CAN A DEFECTIVE TITLE BE CURED?

Depending upon the severity of the title defects, they can usually be corrected with the assistance of an attorney of the seller's choice. Many times, this is done with affidavits, correction deeds and other instruments. In some cases court action may be necessary. Before a title company will issue a policy, the title to the property must be perfected to that company's satisfaction. The title company does not cure bad titles or write legal papers.

HOW DOES TITLE INSURANCE PROTECT MY INVESTMENT IF A CLAIM SHOULD ARISE?

If a claim is made against your property, title insurance will, in accordance with the terms of your policy, assures you legal defense - and pay all court costs and related fees. Also, if the claim proves valid, you will be reimbursed actual loss up to the face amount of the policy.

I THOUGHT MY LOAN POLICY WOULD PROTECT ME?

The loan policy protects the lender against loss due to unknown title defects. It also protects the lender's interest. In certain matters, which may exist but may not be known at the time of sale. This policy only protects the lender's interest. It does not protect you. That's why you need an owner's policy, to be issued at the same time as the loan policy for a nominal one-time fee.