| For
the average property owners, there are two different types
of title insurance policies that you need to be aware of:
- Owner’s Title Insurance Policy
- Mortgagee’s Title Insurance Policy
Since most property owners mortgage or borrow
money at the time of purchase or during ownership, the lender
can be expected to request protection of its investment against
loss. Lenders know that man things are incurred while defending
and attack. They insist upon a Mortgagee’s Title Insurance
Policy to protect their stockholder’s and investors’
investment in your property.
An Owner’s Title Insurance Policy
protects your investment (equity) as the buyer or owner of
the property. As the owner, you should want to have the same
assurance as the lender that the investment you have made
cannot be lost because of a problem or defect with the title.
WHAT DOES A TITLE POLICY COVER?
The title company will for any actual loss
if someone claims an interest in your property and will defend
your title in court because:
- A deed or other document in your chain
of title is invalid as a result of (a) forgery, (b) fraud
against the rightful owner, (c) a signature given under
duress, (d) a signature by someone legally incompetent to
sign of (e) someone claiming to be someone else.
- A lien against your title exists as a
result of a previous owner’s failure to pay: (a) a
mortgage or deed of trust, (b) a judgment, tax or special
assessment (c) a charge by a homeowner’s association
or condominium association. If you receive a notice of a
previous lien, contact your title company immediately and
follow your policy’s claim procedure. Failure to do
so could jeopardize your claim.
- A lien exits for labor or materials furnished
by a contractor without your consent. Generally, your policy
protects you if you buy you house already built, but not
if you own the land and contract with a builder to build
your home. You should consult an attorney about your rights.
- Leases, contracts or options on you land
were not recorded in the public records and not disclosed
to you.
- A notary public erred or someone: (a)
failed to properly sign a document in your chain of title,
(b) made an error in recording the document at the clerk’s
office or (c) failed to deliver the deed according to statutory
requirements.
- The title policy failed to disclose legal
restrictions in how you can use your property.
- The title policy assures you legal right
of access to your property. This means that you have a right
to travel from your property to a public street or road.
- Other liens or encumbrances on your title
but not listed in the policy exceptions.
|
