September 12, 2018
What Does an Owner’s Policy of Title Insurance Cover?
I always recommend to purchasers of a home or other property that they be sure to get themselves an Owner’s Policy of Title Insurance. Some people consider it optional at first glance, but when I explain the possible ramifications, they tend to see the light.
While the lender will almost certainly purchase a Lender’s Policy of Title Insurance, this does not cover a purchaser’s interests.
You want your title to the new property to come to you clear of defect, without any liens, guarded against any past hiccups in the title-transfer process. You need your title to your property to ensure that you can reach the property legally, via a right to access (sometimes a parcel of property is landlocked and there is no access without trespassing on the adjoining property owner’s land, which could be a serious problem). You definitely want your title in the property to be insurable and marketable. Otherwise you might run into roadblocks if ever you decide to sell the property down the road.
Even a thorough title search can miss unrecorded issues with title. Such situations are what an Owner’s Policy of Title Insurance would cover.
The sort of issues covered by an Owner’s Policy would primarily be liens or judgments not found in a search due to human error by the recording clerk in mis-indexing the item when the item was sent in for recording.
If you purchased the property without obtaining an Owner’s Policy of Title Insurance, you would be left vulnerable. You likely would have to cover the court costs of eliminating the matter from your title which may also require you to bring an action to defend the attack on your title. If there were an issue with your title, or a failure of title, you could even have to relinquish the property itself, regardless of what you’ve already paid for it.
At Topouzis & Associates, P.C., not only do we offer the services that ensure your title gets conveyed clear of defects, we supply purchasers with Owner’s Title Insurance Policies. Contact us if you are purchasing a property in Cranston, Rhode Island; Springfield, Massachusetts; or Miami, Florida, so it can go without a hitch—both before and after closing.