Title insurance addresses title defects when the property changes hand. It is a form of indemnity insurance which helps in curing title defects. This policy tackles title problems such as undisclosed heirs making claims for the property, mistakes by recording a document or property taxes not paid by prior owner etc.
Title insurance ensures good title at the time when the property is sold i.e. clear of encumbrances. Be it fraud, forgery, undisclosed heirs or spousal claims, this policy handles various types of ownership issues.
Title insurance is indemnity insurance which fosters safe transactions while purchasing a house. Title insurance exists to defend your title in court as it covers defence cost. This policy covers past title problems. It does not cover future events. It is a one-time payment event and safeguards your title for seven years which is the minimum tenure.
While investing in real estate or any other building investment project, this policy plays an important role as it provides an assurance to the investors or lenders that title insurance will provide financial stability if faced with any title defects. This policy provides you with a peace of mind by minimizing the risk associated with land ownership.
Title insurance covers the legal cost, settlement cost or any other loss caused due to ownership issues. In the real estate business, it becomes mandatory to buy title insurance before starting any new project.
If you are into property business, title insurance is a must-have insurance policy in order to mitigate the risk of after-purchase ownership issues. This policy follows the retrospective effect and addresses all claims related to title defects assumed in past years i.e. prior to the purchase of the property.
Sometimes, if you are investing in real estate and in order to avail a loan, your lender will ask you to purchase title insurance in order to protect the amount they lend.
As unreliable property records could be a serious trust deficit. Hence, it is crucial to buy title insurance in order to facilitate transparency and safe transaction in real estate business. It safeguards the property owner and its lenders against losses related to the property’s title or ownership.
Need not to worry, if mortgage or property taxes were not paid by the prior owner or if your property documents were not recorded properly or any other form of title fraud assumed in your property. During such eventualities, title insurance provides a helping hand to resolve such title issues. This policy provides a sense of security as home buyers will be able to stop worrying about title defects and several other risks which were so far considered part and parcel of investing into real estate business or buying a house.
Naman purchased a property near his workplace without knowing the nitty-gritty about it. Later, a missing heir started making claims to the property which gave rise to title defect. He has to fight the case in court and bear the cost of litigation and settlement. In such case, if Naman would have purchased a title insurance policy, he would be covered for the defence cost which could have saved him from spending against legal expenses or settlement cost.
Hence, it is important to buy title insurance to cover loss due to title issues and protects a buyer’s ownership interest.