When looking to buy property, it can come with liabilities that may cause problems for buyers long after closing the sale. They can be minor issues that require little to no work to resolve. Other times, the problems can be too big to ignore, impacting your ownership rights years after finalizing the property’s sale. In these situations, title insurance can help cover costs related to these issues.
There is no law requiring title insurance, but some lenders may consider it mandatory before granting a mortgage. It can cover losses in specific situations, including scenarios involving the following title defects:
- Any incorrect or inaccurate documents and deeds made on the property that you do not know about
- Any form of fraud committed involving the property’s documentation
- Liens left on the property, including overdue contractor bills, property taxes and other necessary payments
- Any title defect arising from encroachments and other boundary line issues
These defects may appear during a title search, but some can remain hidden for a long time. Title insurance is often necessary when lenders finalize details before transferring ownership rights to you as the new owner. Aside from protecting lenders, it can also secure your rights in any instance that someone else makes a valid claim over the property.
Knowing what to do about title issues
Addressing title defects and issues can be a challenging feat. Some problems can be quick to resolve, while others are complicated, requiring extensive time and money to fix. When buying property, seeking legal counsel to learn about possible protections like title insurance can be beneficial. Having experienced guidance can also help you navigate transactions efficiently and address other issues that may arise.