Title insurance is a policy that covers third-party claims on a property that don’t show up in the initial title search and arise after a real estate closing. A third party someone other than the property’s owner, such as a construction company that didn’t get paid for its work on the home under a previous owner. The term “title” refers to someone’s legal ownership of the property. A title claim could arise at any time, even after you’ve owned the property with no problems for many years. How could this happen? Someone else might have ownership rights that you don’t know about when you make an offer to buy a property. Even the current owner might not be aware that someone else has a claim on the property. In the case of an overlooked heir, even the person who has those rights might not know they have them.
Real estate title insurance Boca can protect you from having to pay for these types of claims. Out of pocket and can help prevent foreclosure if your lender requires. It before approving your mortgage loan application or refinancing request.
Before you close on your new home, your mortgage lender will order a title search from a title company. The title company will search for public records related to your home in an attempt to find. Any title defects—specifically, liens and easements that could affect the lender’s or buyer’s property rights.
Liens are placed on the property by contractors, tax authorities, or lenders who haven’t been paid. You don’t want to get stuck paying someone else’s unpaid bills.
Easements are someone else’s right to use your property even though you are the owner. For example, if there are utility lines in your backyard, the utility company will have an easement. That allows them to access your property if they need to work on the lines. The easement could limit your ability to use your property however you want.
Encumbrances include liens (also called “financial encumbrances”) as well as easements. But also include zoning laws and restrictions imposed by homeowners associations and leaseholder rights.
When you buy a house, your title company will search the public records for your property. And all the properties around it to make sure there are no problems with any of the titles. The public records a title company searches include deeds, mortgages, divorce decrees, court judgments, tax records and child support orders.
If the title search reveals any problems (also called “clouds”), the title company will try to resolve them. In some cases, your real estate agent will need to work with the seller’s agent to get the seller to resolve the problem. In other cases, the problem may be significant enough to derail the sale.
Real estate title insurance Boca protects your property ownership rights. It doesn’t protect you against issues newly created or discovered after the policy purchased. For example, if a neighbor moves into your yard and builds a structure on it while you’re out of town. Or if you discover that someone has been living in your basement without your knowledge. It also doesn’t cover problems created by your own actions—for example. If you fail to pay the company that replaced your roof or didn’t pay your property taxes.