Owners title insurance is an elective expense when purchasing or refinancing a property. It only needs to be bought once by a homeowner and will guard against title issues for the entire time that they own a property. Understanding what title defects include will help homeowners decide whether to purchase title insurance. Title problems and the importance of title insurance in MA can be found below.
What Are Title Defects
Title defects are not typical but they can have a significant impact if they do exist. Defects are conditions that call into question the legal owner of a piece of real estate. Even though a title search is completed in most property transfers, some problems are not easily found and can stay hidden for many years and through several transfers of ownership. Any uncovered issues must typically be resolved before the completion of a sale, but in situations where they are not detected, title insurance protects the owner of the home.
Title Issues Covered by Title Insurance
Title issues describe a wide range of scenarios. Below are just a few examples (keep in mind that this can vary based on the insurance company).
- Missing Parties
- Unrecorded Liens
- Unfiled Releases
- Failure to Follow Proper Recording Instructions
- Unrecorded Encumbrances
- Undisclosed Heirs
- Mental Incompetence of a Signing Party
- Mistaken Identity
- Problematic Deeds
Title Problems And The Importance Of Title Insurance
If you purchased an owners title insurance policy, the insurance agent will either handle the issue or reimburse you for resulting losses. It may even help defend a law suit jeopardizing your ownership rights. Policies are bought based on a particular dollar value, so maximum limits do apply. Additionally, specific issues may be exclusions on your policy. Ask your closing attorney for a full list and for additional details on title problems and the importance of title insurance in MA. In the End, owners title insurance is the best protectopn of your ownership rights to a property. Even though the fee can be high, it is payable only one-time and covers you and your heirs for as long as you own a home. It is certainly worth the cost given that a home purchase can be the biggest single investment that you make.