“Why do I need title insurance if a title search has been conducted and no apparent title defects exist?”
It’s a good question, yet the answer may surprise you …
There are many kinds of serious title defects which may be unknown or hidden … these are defects which cannot be uncovered by a competent title search!
FOR EXAMPLE …
An unknown heir steps forward to claim title; a forgery on a deed was made over 50 years ago; a deed was executed under duress; a final probate was never completed for a decedent in title; the clerk of court made a recording error or misapplied a tax payment …
… These are just a few of the hidden “title defects” that could cause you to lose your property.
And, even if you don’t lose your property altogether, title problems could make it impossible for you to sell.
You don’t want a problem that occurred long before you bought your property to deprive you of your right to use or dispose of it.
And you don’t want to pay the potentially high cost of defending your property rights in court.
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An Owner’s Policy of Title Insurance is your best protection against potential defects that can remain hidden despite the search of public records.
A Loan Policy of title insurance also exists to protect your mortgage lender’s interest.
With payment of a one-time premium, our underwriters will issue you a policy of title insurance protecting you against covered losses suffered due to undetected title defects which existed prior to the issuance date of the policy, up to the amount of the policy.
Your title insurance policy also provides for legal defense costs unless the title matter is specifically excluded.
The following title defects are insured against in most standard title polices:
- Forged deeds, mortgages, satisfactions, or releases
- Deed by person who is insane or mentally incompetent
- Deed by minor (may be disavowed)
- Deed from corporation, unauthorized under corporate by-laws or given under falsified corporate resolution
- Deed from partnership, unauthorized under partnership agreement
- Deed from purported trustee, unauthorized under trust agreement
- Deed to or from a “corporation” before incorporation, or after loss of corporate charter
- Deed from a legal nonentity (styled, for example, as a church, charity, or club)
- Deed by person in a foreign country, vulnerable to challenge as incompetent, unauthorized, or defective under foreign laws
- Claims resulting from use of “alias” or fictitious name style by a predecessor in title
- Deed challenged as being given under fraud, undue influence, or duress
- Deed following non-judicial foreclosure, where required procedure was not followed
- Deed affecting land in judicial proceedings (bankruptcy, receivership, probate, conservatorship, dissolution of marriage) unauthorized by court
- Deed following judicial proceedings subject to appeal or further court order
- Deed following judicial proceedings where all necessary parties were not joined
- Lack of jurisdiction over persons or property in judicial proceedings
- Deed signed by mistake (grantor did not know what was signed)
- Deed executed under falsified power of attorney
- Deed executed under expired power of attorney (death, disability, or insanity of principal)
- Deed apparently valid, but actually delivered after death of grantor or grantee, or without consent of grantor
- Deed affecting property purported to be separate property of grantor, which is in fact community or jointly owned property
- Undisclosed divorce of one who conveys as sole heir of a deceased former spouse
- Deed affecting property of deceased person, not joining all heirs
- Deed following administration of estate of missing person who later reappears
- Conveyance by heir or survivor of a joint estate who murdered the decedent
- Conveyances and proceedings affecting the rights of service member protected by the Service-Members Civil Relief Act
- Conveyance void as in violation of public policy (payment of gambling debt, payment for contract to commit crime, or conveyance made in restraint of trade)
- Deed to land including “wetlands” subject to public trust (vesting title in government to protect public interest in navigation, commerce, fishing, and recreation)
- Deed from government entity, vulnerable to challenge as unauthorized or unlawful
- Ineffective release of prior satisfied mortgage due to acquisition of note by bona-fide purchaser (without notice of satisfaction)
- Ineffective release of prior satisfied mortgage due to bankruptcy of creditor prior to recording of release (avoiding powers in bankruptcy)
- Ineffective release of prior mortgage or lien, as fraudulently obtained by predecessor in title
- Disputed release of prior mortgage or lien, as given under mistake or misunderstanding
- Ineffective subordination agreement causing junior interest to be reinstated to priority
- Deed recorded but not properly indexed so as to be locatable in the land records
- Undisclosed but recorded federal or state tax lien
- Undisclosed but recorded judgment or spousal/child support lien
- Undisclosed but recorded prior mortgage
- Undisclosed but recorded notice of pending lawsuit affecting land
- Undisclosed but recorded environmental lien
- Undisclosed but recorded option, or right of first refusal, to purchase property
- Undisclosed but recorded covenants or restrictions, with (or without) rights of reverter
- Undisclosed but recorded easements (for access, utilities, drainage, airspace, views) benefiting neighboring land
- Undisclosed but recorded boundary, party wall, or setback agreements
- Errors in tax record (mailing tax bill to wrong party resulting in tax sale, or crediting payment to wrong property)
- Erroneous release of tax or assessment liens, which are later reinstated to the tax rolls
- Erroneous reports furnished by tax officials (not binding local government
- Special assessments which become liens upon passage of a law or ordinance, but before recorded notice or commencement of improvements of which assessment is made
- Adverse claim of vendor’s lien
- Adverse claim of equitable lien
- Ambiguous covenants or restrictions in ancient documents
- Misinterpretation of wills, deeds, and other instruments
- Discovery of will of supposed intestate individual, after probate
- Discovery of later will after probate of first will
- Erroneous or inadequate legal description
- Deed to land without a right of access to a public street or road
- Deed to land with legal access subject to undisclosed but recorded conditions or restrictions
- Right of access wiped out by foreclosure on neighboring land
- Patent defects in recorded instruments (for example, failure to attach notarial acknowledgment or a legal description)
- Defective acknowledgment due to lack of authority of notary (acknowledgment taken before commission or after expiration of commission)
- Forged notarization or witness acknowledgment
- Deed not properly recorded (wrong county, missing pages or other contents, or without required payment)
- Deed from grantor who is claimed to have acquired title through fraud upon creditors of a prior owner
And an extended coverage policy may be requested to protect against other defects, such as:
- Deed to a purchaser from one who has previously sold or leased the same land to a third party under an unrecorded contract, where the third party is in possession of the premises
- Claimed prescriptive rights, not of record and not disclosed by survey
- Physical location of easement (underground pipe or sewer line) which does not conform with easement of record
- Deed to land with improvements encroaching upon land of another
- Incorrect survey (misstating location, dimensions, area easements, or improvements upon land)
- “Mechanics’ lien” claims (securing payment of contractors and material suppliers for improvements) which may attach without recorded notice
- Federal estate or state inheritance tax liens (may attach without recorded notice)
- Preexisting violation of subdivision mapping laws
- Preexisting violation of zoning ordinances
- Preexisting violation of conditions, covenants, and restrictions affecting the land.
- Title insurance is one of the most important purchases you can make to protect one of the largest investments you have. Protecting your home makes good financial sense.
As agents of several leading nation title underwriters, we look forward to providing the protection you need for your property, now and in the future.
First Title & Abstract, Inc. has been serving Collier County for nearly four decades. We are THE most trusted Naples, FL title company, with offices on Marco Island and in Naples, Florida.
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* Article taken from information published by First American Title Insurance Company.
