The Benefits Of Title Insurance

Posted on May 24, 2011 by IC N in Legal

A Clear Real Estate Title

Real estate title is a legal term used for a collection of rights in a piece of property that one or more parties may own a legal interest or an equitable interest in. This may also be a formal document that serves as evidence of ownership. When most individuals purchase property, they expect to own it without hindrances, such as another person claiming ownership of the property, easement rights giving access across the property, or liens securing repayment of a debt.

Establishment Of A Clear Real Estate Title

A search begins with the most recent deed, starting with the current owner, and moves backward through time until the searcher finds the U.S. patent that established the originating deed. This type of search not only establishes an ownership chain, but also reveals reconvenvances that prove an obstruction is paid off, easement issues such as rights-of way, and other elements that could have an effect on a clear real estate title.

In general, every time a transaction takes place, the transfer instrument (a granting of easement, a lien against the property, etc) is recorded with the local recorders office where the land lies. The document is then indexed by the names of the transferor and the transferee and placed within the system so that anyone who wants to view it can do so. For the purpose of this discussion, a company will examine the documents and make a determination as to whether the property has defects associated with it or not. Once the process is complete, the company will issue a policy based upon the recorded information.

Insurance For Deficiencies In Land Records

As with all things, mistakes in the plotting of land parcels and recording deed transfers can occur. Sometimes, a document is mishandled by the recorders office or the transferor made a mistake when recording the information. This insurance protects sellers, buyers, and lenders from financial loss due to defects that were not revealed during the search. Indemnity policies defend against any lawsuit, as it is insured or reimburses the insured for any actual monetary loss incurred up to the amount specified in the indemnity policy.

Real estate title insurance is necessary, when you’re buying a home. This one time fee can provide a great deal of peace of mind. Although it’s not something that most people think of after signing the closing documents, it can prove useful if it’s ever needed.

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About the Author

Chris Harmen writes for Title Junction, a full service title company that offers real estate title searches and title insurance for the communities of Cape Coral and Fort Myers, Florida.