No matter how new your home is, it has a history. A complete title search can uncover any title problems connected to your property. And, as long as you have purchased an owner’s title insurance policy at the time of closing, your policy provides protection for you with issues that may come to light after you purchase your home. Common title issues include:
ERRORS IN PUBLIC RECORDS
No one is perfect, but sometimes mistakes in public records can have a huge impact on your ownership of the real estate you purchased. If there is a clerical or filing error on your property deed or survey, it can cause a lot of financial problems trying to fix it.
Sometimes, when you buy a house, the people who owned it before you didn't take care of their bills. So even though the debt is not your own, the bank or other company that loaned money to the previous owners can put a lien on your property. This is especially a problem if you are buying a distressed property.
Even if it appears that the title to your property is in order, it's possible that there are problems with a deed in a title examination. This could be because the person who signed it did not have the legal right to do so - for example, they were an undocumented immigrant, a minor, or had a mental illness. If this is the case, then earlier deeds may not be legally binding, which could affect your ownership of the property.
When a person dies, the ownership of their home may fall to their heirs or those named within their will. If the heirs are not known or missing at the time of death, other family members may contest the will in order to acquire the property for themselves. These scenarios can happen long after you have purchased the property and can affect your rights to it.
You may have seen several surveys of your property prior to purchasing it, but other surveys with different boundaries may exist. As a result, your neighbor or another party may be able to claim ownership of a portion of your property.
Unfortunately, we don't live in a perfect world. Sometimes people will file fake or forged documents that affect property ownership within public records. This can make it harder to prove that you own the property. If this happens, you may lose your rights to the home.
When you buy a home, there may be someone else who has a claim to it. This could be because they have a former mortgage or lien on the property, or because of some other non-financial claim, like restrictions or covenants that limit what you can do with the property.
Even if you own your home and the land it is on, an easement may still exist that restricts your ability to use the property in the way you want. An easement is a legal agreement that allows someone else access to all or part of your property. While usually not a financial issue, an easement can still affect your quality of life if it allows others access to your property.
The state will sell the property if a property owner dies with no will or heir. When you buy it, you become the new owner. But even years later, the deceased owner's will may come to light and your ownership of the property may be in danger.
FALSE IMPERSONATION OF PREVIOUS OWNER
If you purchase a home that was once sold by a false owner, you can risk losing your legal claim to the property. This is because it is possible for someone with a common or similar name to impersonate the actual property owner.
An Owner's Policy of title insurance covers you against losses that might occur should any of these problems arise, subject to the terms as written in your owner title insurance policy. It is the least cost you will have in the investment with your purchase, and it is a one-time premium! It's one more way to help give you peace of mind in your new home.
If you're buying a home, please ask any of our closing agents questions you may have regarding owner’s title insurance and how it protects your ownership. We assure you, it will be one of the best decisions you ever make in your purchase of real estate!
Also, check out our other blog post on why title insurance is essential to learn more.