What Title Insurance Protects Against
- Liens from unpaid estate, inheritance, income, and gift taxes.
- Defective acknowledgment due to lack of authority of notary.
(Acknowledgment taken before commission or after expiration
of commission.)
- Descriptions apparently but not actually adequate.
- Deed from bigamous couple - prior existing marriage
in another jurisdiction.
- Mistake in recording legal documents. (For example, incorrect
indexing or errors and omissions in transcribing, and failure
to preserve original instruments.)
- Special assessments where they became lien upon passage of
resolution and before recordation or commencement of improvements
for which assessed.
- Recorded easement, but erroneous ancient location of pipe
or sewer line which does not follow route of granted easement.
- Undisclosed divorce of spouse who conveys as sole heir of
deceased consort.
- Deed from record owner of land where he has sold property
to another purchaser on unrecorded land contract and the purchaser
has taken possession of premises.
- Tax titles invalid because of irregularity of proceeding,
reversal of court decisions, or lack of decisions on points
of law.
- Fraud, duress or coercion in securing essential signatures.
- Deeds by persons of unsound mind.
- Invalid, suppressed, undisclosed, and erroneous interpretation
of wills.
Two Kinds of Title Policies?
A mortgage company will require a title policy for its own protection.
This policy protects ONLY the lender and is referred to as the
LENDER'S title insurance policy.
HOWEVER, to protect himself/herself against the many possibilities
of loss due to title defects, a purchaser should insist upon an
OWNER'S title insurance policy. The additional cost of an OWNER'S
policy is nominal when purchased at the time of settlement simultaneously
with the LENDER'S policy.
|
Here
are some of the most common HIDDEN RISKS that can cause a loss
of title or create an encumbrance on title: