Why Title Insurance Matters Matter.

Real Estate Law

When it comes to purchasing a home, there is one critical aspect that many homebuyers completely overlook.

What is that?

Title Insurance.

So why is title insurance important when it comes to real estate transactions?

Well, let’s see.

What Title Insurance Is and What it Does.  

First, let’s discuss what title insurance is and what it does.

Title insurance is an insurance policy that pays the policy holder if there is anything wrong with title to the property. Title insurance guarantees that a property is free of liens and clouds against title. It is an insurance contract —not a guarantee.

When property changes hands, a deed memorializing the change in title to the property is recorded at the local Recorder’s Office. However, because the recorder of deeds does not “guarantee” accuracy in its record-keeping, that means that it is possible for someone who has a valid claim to the property to assert a claim to it. Think of it this way: if the Recorder’s Office’s records are not correct, it could mean that someone  who has a deed  that was recorded before your deed was recorded, may have a claim to your newly-purchased home. Title insurance pays for the cost of “perfecting” title to the property, or for losses that are covered by the policy.

In other words, title insurance indemnifies the insured (you as the purchaser of the property, for example) for actual loss arising from matters covered under the policy’s terms.

Of course, not everything is covered under the policy’s terms. For example, if the title insurance issued to a purchaser prior to closing identified the existence an unrecorded roadway easement on the property, the policy would not cover any losses suffered by the purchaser later arising from the easement.

Why?

Because the title insurance gave notice of the defect.

Why It’s Important.

When you are purchasing property, you need title insurance to protect you against title defects like those cited above. You also need to be certain that the person selling you the property is the true owner of that property. Title insurance tells you what the owner’s interest in the property is (i.e., fee, life estate, tenancy in common etc.) and when he/she obtained that interest.

Title insurance is important because it minimizes the potential liability to the property owner by making an extensive search of title to discover any foreseeable title issues.

There is far more to know about title insurance, so if you are contemplating a real estate purchase or exchange, consult with an experienced real estate attorney.

Helping You With All Your Real Estate Needs.

As real estate attorneys located in Cumming, Georgia, the attorneys at the Law Offices of Mark Weinstein, P.C, have experience in all aspects of real estate. We serve Atlanta and the surrounding counties. For more information, call us at: 770-888-7707. Or you can contact us here.

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