Knowing About Title Insurance
Land typically is a very good investment because unlike personal possessions that could become obsolete, lose value, or even become immobile like cars, by comparison, land is indestructible and does not depreciate. This makes it common to associate land and control of it to be considered a symbol of power and wealth.
In the past, especially during the middle ages, land ownership was typically reserved for the nobility and common people either rented or owned only a small or insignificant parcel of land. This especially applied during the period or era of feudalism when landlords directly receive land from the monarch and then they rent out parts of it to tenants in exchange for services, goods, or money. Luckily for us in this modern time, as long as you have hard earned money you can typically purchase any piece of land you want that is available in the market. Before, feudal lords were actually chosen by the monarchy to live and work in the land and this was possible by granting privileges by way of licenses. These lands of course are still subject to the king’s first rights and taxes on land and produce. As the period had gone by, the feudal lords wanted to secure the ownership or these worked lands. They then developed ways of obtaining rights from the monarchy that would allow them to let their beneficiaries inherit the land rather than returning it to the monarchy. Unfortunately this system is not without flaws as there are many issues relevant to land ownership.
Back when there was no Title Insurance yet, the transfer of property did not guarantee at all anything. The purchaser basically is not secure and may not essentially know if the property bought is legit and is owned by the seller. Though lawyers prior to the advent of title insurance can still based their opinion on the land title abstract still there was no assurance that the buyer was protected from fraud due to undisclosed details on a certain property.
What is Title Insurance?
By definition, it is a contract between the buyer and insurer (Title Insurance Company). The title insurer provides protection or security against future losses that is a consequence of possible title defects or inconsistencies and this is done in exchange for a premium that is paid by the buyer. The policy takes effect immediately by the date the title insurer releases the policy. If you happen to be a property developer in South East Asia, having title insurance gives you the assurance that the property you are buying will be yours. Having a real estate to own is value you enjoy in this modern and civilized world and getting insurance protects you and gives security to your investment. Aside from the mortgage or finance company there should basically be no other entity that can claim or put restrictions on your property. The title insurance basically eliminate the risks and losses that can happen with flaws or inconsistencies coming from scenarios that happened before you owned this certain property.
Protection is important even in land titles as this investment is considered long term and involve a hefty amount of money and that’s why it is a necessity to protect yourself to protect your client if you are a property developer. As mentioned earlier the title insurance protects the purchaser and his lender from losses that may occur against the ownership of the property. It is by far distinct as it provides the buyer coverage of other unforeseen problem and hidden risks coming from errors, forgery, and unpaid taxes. These are usually the thing that could jeopardize a buyer’s ownership rights and is essentially the essence of having this particular kind of insurance. Talking about cost of title insurance may involve the title search where the title insurer will conduct a thorough examination of existing historical and public records that concern the property. The records usually include deeds, court records, property and name indexes and other relevant public documents. The purpose of this particular search is largely for verification of the seller’s right to transfer property ownership and to know if there are any flaws or if anything is wrong in the land title.
Aside from showing all the defects in the land title the search also includes judgments, liens, and restriction which may include unpaid taxes, outstanding loans, etc. among other which is really important to know. In the point of view of the seller this insurance policy may not necessarily protect the future buyer as the flaws discussed could have had occurred during the seller’s ownership. It is given that a new title search must be conducted by the buyer in order to protect his/her ownership rights once the property is already acquired.
Title Insurance Coverage
You have a protection from financial loss due to the fact that the claims are covered against the buyer’s title ·
The payments of any legal costs associated with covered claims are included. ·
The payment of successful claims against a buyer’s title is included.
Possible Exclusions and Exceptions to be Aware of; ·
Unrecorded title defect ·
Condemned land ·
Building of zoning ordinances that have violations ·
Payments are required with exception of legal access rights because the deed failed to give rights of use to adjacent land, streets, and alleys or waterways. ·
Restrictive covenants on limiting the use of the property. ·
The discrepancies, conflicts or shortages in area, boundary lines, encroachments, protrusions or overlapping improvements. ·
The rights of usage claims that arise if the property is on or near a body of water, river, and stream. ·
The adverse possession claims from supposed claimants of the whole or even a portion of the property that is in question. ·
The declaration of title irregularities that arises from a deceased person’s estate, trust, or bankrupt estate. It really is a sound decision to buy property insurance together with buying your real estate property as an added financial protection in cases when things just go wrong in uncontrollable circumstance regarding the property and its contents. But you also need to make sure that the title you have is clear. Making sure you have a clear title is a top priority as you may risk losing your property if the land it sits on is illegitimately owned. This is why the Title Insurance comes in handy and considered an absolute need for any foreign owned property development in Southeast Asia. The issue on claims on property has been around for years and these include cases such as undisclosed easement, lack of due process in upgrades to title, tax liens. There are just many who could do claims and it pays to be protected. This would include claims from other homeowners, business interest, government agencies, and even the land department itself.
The Title Insurance just comes as a necessity because it provides indemnity up to the full purchase price of the property against all losses that is due to errors, omissions, or fraud that may affect the property title upon purchasing. If in case a dispute or claim arises with regards to the title, the insurer would be the one to defend the claim in court and indemnify the owner to the full value of the land, property and even including the necessary legal fees. This, as previously said, provides financial indemnity against any claims against your title by any person or institution so that you can have peace of mind and security. This assures you that you benefit from your investment freely and the risks really lessens from inconsistencies or flaws like fraud, forgery, a weak ownership fail, and past history of conflicts or claims against the land.