The process of buying a house in Plantation, FL can be long, but it is worth the effort. You will enjoy the benefits for years to come, whether you are raising your family or retiring. All of this can be at risk if the property title is compromised. This is especially true when purchasing a property without doing proper research. By contacting the experts for title insurance as soon as possible, you can avoid this nightmare and ensure that the property purchased is yours.
Title Insurance: Understanding the mechanics
In general, insurance provides financial recovery of a particular thing or activity. Title insurance can protect a buyer of real estate from financial loss in the event that a property’s legal ownership is compromised. When it is discovered that the property sold to a purchaser was not owned or represented correctly, legal ownership can be challenged. A buyer assumes a property is sold free of legal issues.
This means that, upon purchase, full ownership of a property is transferred to the buyer. (Apart from any mortgages involved). It can be more common than you think that a sold property has unresolved ownership issues. These can include multiple owners hidden in the title history; an incorrect transfer made in the past; liens on the property for money owed or as collateral and unpaid taxes. When the title has not been handled correctly before the sale of the property, a new buyer may be left with a major problem. This usually manifests as a lawsuit.
When the transfer of title fails, title insurance can be very useful. Property ownership is most vulnerable during the transfer of property. This usually occurs in an escrow. All parties must cooperate and do their part. Intermediaries also need to be professional and process the paperwork correctly. Even if there are no deliberate problems, mistakes can still occur. Simple typos can result in the ownership of a home or property being transferred incorrectly. This type of mistake should also be protected by title insurance.
Who writes up title insurance?
The escrow agent hired by the lender will manage the purchase of the property if a homebuyer doesn’t take action. The seller coordinates with the officer to complete the transaction and exchange legal documents. This might seem simple and straight forward, but the buyer is placing a great deal of trust in both the escrow officer’s and the lender’s services to protect the buyer’s interests.
In reality, lenders are well protected as they ensure that their financial interests are adequately defended. The buyer is not guaranteed to receive any personal protection. Some generic policies include a boilerplate standard protection while others may not. The buyer will not know if there is an error, mistake or intentional slip in the title history unless they read the policy or try to use it.
If the buyer provides their own title policy, which has been drafted and reviewed by an attorney, their interests will be protected and the document as well as transaction that it protects are better written for their interests. The insurance contracts of both the buyer and lender can be combined into one document through escrow negotiation. Many homebuyers do not know how to request or obtain representation in this area.
What to look out for when transferring a title
The history of a title is the biggest concern. Title history is a complex issue because a title can go back to when a parcel of land was first created as a private section of real estate. It is more difficult to track transfers because not all of them are a simple one-to-one exchange. One transfer might be a division of property from one party to two or three other parties. A real property title could also be transferred temporarily, as with a lease. Some transfers are partial, but permanent. For example, an easement. When a home is sold, the combination of the history and the different transactions can create a risk that the title will not be completely clean. This is especially true when it comes to a used house sale.
It can be due to clerical mistakes made by the local government in the processing of the paperwork. There may also be things that are left out, or people who intentionally try to re-file fraudulent transfers, whether partial or complete. Title fraud is more common than most people realize because processing clerks do not regularly check records when making changes to title. If a “defect”, or problem, is found, the seller must fix it to ensure a smooth transaction. The sale would not be valid if it was not done. Unfortunately, this can be a place where a buyer gets burned by paying for an item that is later found to be defective. The buyer loses money if no one checks the purchase at the time of the sale.
A buyer’s lawyer can then check the title again after making any corrections to ensure that it is indeed a clean transfer. The escrow can be closed, the title recorded and transferred correctly to the new buyer and the value of the property is fully exchanged.
In the event that something goes wrong, you can also get protection and coverage from the title insurance for buyers.
Get Started in the Right Way
It’s smart to hire your own attorney if you are thinking of buying a house in Plantation, FL and want more protection. You are the only one who is responsible for your safety as a buyer. It is still true that the old Roman rule, caveat emptor (buyer beware), applies. You can have a much more reliable home buying transaction with a title search and an attorney reviewing your title insurance policy.
The article Plantation, FL: Have an attorney write your title insurance first appeared on Attorney at Law Magazine.