Title Insurance misconceptions

It’s important to know a little about title insurance matters during a real estate purchase transaction. Be aware, it is not the role of a real estate agent to offer advice about specific policies, however, a good agent should be able to point out possible issues to be investigated further in detail.

Title insurance keeps potentially small legal issues from snowballing.

A property disclosure should be part of any residential transaction, although not required by law in the sate of Florida. If you got a property disclosure along with your contract to purchase, the property disclosure should be reviewed thoroughly because a property disclosure may affect title insurance coverage for future claims.

The following are common misconceptions that consumers and licensed real estate practitioners may have about title insurance:

  1. Only title insurance policy is paid for at closing.

f the property is purchased with a bank loan, two title policies are usually paid for at the closing:

  • An owners policy – Insures the person or entity that acquired title.
  • Loan policy- Insures the loan.

2. The title insurer must fix any title issues  so escrow can close on time.

The title insurer has the right and obligation to investigate the claim, however, the insurer is not required to fix the problem so escrow can close on time, nor is the insurer  liable for loss arising from delay or loss of a sale.

3. Title insurance only insures “clear title.”

Policies typically cover:

  • Defects
  • Liens
  • or encumbrances on title

But depending on the form they may also cover:

  • Losses related to access
  • Building permits
  • subdivision of the land
  • Zoning
  • Land use
  • Encroachments
  • Setbacks
  • Easements
  • Damage to structures
  • Supplemental tax assessments

4.    Title insurance covers matters shown in the policy.

           If an item is listed in Schedule B of the policy, any loss arising from               that item is exempt from coverage.

For example, if Schedule B of the policy lists a roadway easement in favor of the owner of the adjacent property, any dispute or loss arising from that easement is not covered by the policy.

5. There is no requirement for a title insurance policy when refinancing.

A new loan policy insuring the refinance mortgage will be required, but generally an endorsement to the original policy or other arrangements may be made to reduce the cost of insuring the refinance  mortgage.

6.  The title insurer will clear title if a covered title problem is                           discovered.

        Surprise, surprise. The title insurer is not required to clear title. If a              claim is covered, the title insurer has options it can exercise. Such as:

  • Attempt to fix the problem
  • Filing a lawsuit
  • Negotiating a settlement with the insured or a third party
  • Paying the insured’s compensable loss.

7.  Title insurance guarantees a property is free of liens and clouds                  against title.

Title insurance is not a guarantee. It’s an insurance contract, indemnifying the insured for actual loss arising from matters covered under the policy’s terms. Not everything is covered. Get the facts from a title company or insurance agent. There are plenty of reputable title and insurance companies in Doral. Feel free to contact us for a list of local Doral, Fl professionals.

 

Recuset Realty is a local, full service residential and commercial real estate firm based in South Florida. Independent and privately owned since its founding in 2015, the firm is a member of National Association of Realtors , and founders of teamDoral a network of independent business owners based in Doral, Fl. providing global integrated service solutions.

The firm’s property management and brokerage services include tenant/landlord and buyer/seller representation; agency/project leasing; capital advisory/investment sales; retail services and more. For more information, visit http://www.recusetrealty.com

“Si usted no dispone del tiempo y/o no posee los conocimientos, entreguele la propiedad en manos de un Corredor calificado”

*Nothing in this article is intended to solicit listings currently under contract with another broker.  This article offers no legal or tax advise and is for information purposes only.

#RecusetRealtyRocks

 

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