Written by Ben Poole | HGR Graham Partners LLP
For most people. the purchase of property will be one of the biggest investments they make during their lifetime. And, like all investments, the purchase of property is not without its risks.
Open building permits. boundary issues. and fraud are just a few of the hazards that can cost a buyer considerable time and money after a real estate deal has closed. Title Insurance is a powerful tool that insures over these types of title risks and is used by most buyers in real estate deals today.
The Days Before Title Insurance – A Solicitor’s Opinion
Before Title insurance, a solicitor’s opinion on title was standard. To provide a solicitor’s opinion, the lawyer in question must conduct a wide array of searches in an attempt to discover any and all t it le issues affecting a property. This requires a substantial amount of due diligence by the lawyer and disbursement costs for the client. The opinion is only as accurate as the records
searched and responses received. To make matters worse, this process can be lengthy. This becomes an issue as time is not always a luxury found in real estate deals, especially today.
Title Insurance – A Cost-Effective and Comprehensive Option
While a solicitor’s opinion remains an option, most buyers today opt for a Title Insurance policy instead. Here, many of the searches need not be conducted by the lawyer as the policy insures over issues related to title that exist at the time of closing. Importantly, Title Insurance has the added benefit of protecting you against fraud. For example, it offers coverage if someone were to fraudulently sell or place a mortgage on your property. Additionally, it is worth noting that Title Insurance is not exclusive to buyers. Homeowners who are looking to protect their property can apply for an existing homeowner policy which insures against many of the same title issues, including fraud.
Title Insurance is also required by most lenders as a condition for financing. Its cost is usually a one-time premium, and coverage lasts for the duration of your ownership. Further, maximum coverage often extends well beyond the value of your property to account for the increase of your property’s value over time. In these instances. your lawyer will facilitate the application process for the policy in addition to their other duties associated with seeing the transaction from beginning to end.
That said, Title Insurance is not infallible. Certain title defects will not be covered under your policy. These commonly include indigenous claims, environmental hazards, or defects that were known by you prior to dosing.
Is Title Insurance Right For You?
At the end of the day, the purchase of property should not be taken lightly. In that regard, Title insurance remains a leading option used by buyers to protect against title-related issues and fraud. It may equally be used by current homeowners to protect property they have already purchased. Any buyer or homeowner who is serious about protecting their real estate investment would be wise to consider Title insurance.
This article Is Intended to be a general introductory guide to Title Insurance only. It does not constitute legal or professional advice or an opinion by HGR Graham Partners LLP In any way. This article should not be construed as legal advice and should not be relied on as such.