Owner’s title insurance offers a homeowner protection in the event that someone files a lawsuit against him (or her) and professes to have a claim against the property dating to before it was purchased. A “title” is a document (e.g. a deed) that serves as proof of legal ownership of a home. Claims against a property often arise as a result of the previous owner’s failure to pay taxes or from contractors who state they have not been paid in full for work performed on the home prior to the date the new owner purchased it (mechanics lien). Depending on the state, it may be up to either the homebuyer or the seller to pay for owner’s title insurance.
Owner’s title insurance should also be distinguished from lender’s title insurance. Typically, these types of insurance policies simply cover claims that impact a lender’s mortgage loan.
What Does It Cover?
As a homeowner, it’s important for you to understand that owner’s title insurance is different from other types of protection (e.g. car insurance) for one notable reason. Most other forms of insurance protect you against incidents that may occur sometime in the future. Meanwhile, owner’s title insurance offers coverage for possible title issues from the past – even those you may be currently unaware of. Here is a close analysis of four different types of claims that owner’s title insurance can protect you from.
Claims Made Against The Home
There are multiple types of claims that may be made against a property that date from before you purchased it. These include unpaid taxes and defects to a title such as:
- Unknown liens, easements and encumbrances
- Public record errors (e.g. an incomplete or inaccurate description of the property, typo in homeowner’s name listed on the title)
- Property restrictions (e.g. obstructing a neighbor’s view, type and number of vehicles)
Disagreements About Property Lines
Disputes over property lines can sometimes occur after you purchase a new home, especially if your or your neighbor’s property includes a large piece of land. If there are no fences or other clear barriers separating two properties, disagreements can also easily ensue. Fortunately, owner’s title insurance can protect you in these types of instances. You should also check your state or local community’s laws for specific explanations of property boundaries, as this may potentially help resolve your disagreement. If necessary, you may also enlist the help of a mediator and hire a real estate attorney who is knowledgeable about home title issues.
Discovery Of Lawsuits Regarding The Property
Owner’s title insurance can also protect you against undisclosed liens and lawsuits against your property. Lawsuits against a home are frequently filed over problems such as title defects, property lines, and issues related to zoning and land use. Failure to comply with local zoning regulations and land use laws, for example, may often result in legal disputes with government bodies. Zoning regulations may include restrictions on the location of utility lines, accessory buildings, and the size and height of such buildings, among other things. These laws may potentially be updated every few years, so be sure to always remain informed about this subject.
Disputes About Property Rights
A dispute may also arise over whether the seller had the right to sell you your new property. For instance, if the person who sold you your new property is the previous homeowner and he/she signed an exclusive right-to-sell listing agreement, this may be an issue. This is because under this type of agreement, a homeowner is not allowed to sell a property him/herself without paying a commission to a broker unless a specific exception is made. If the previous homeowner violates this agreement, his/her broker may argue he/she did not have the right to sell the property.
Speak To The Owner’s Title Insurance Professionals
Contact the professionals at Mathis Title Company in Fairfax, Virginia, for more information on owner’s title insurance and what it covers. We provide both real estate settlement services and legal advice to homebuyers and sellers.
The experienced team at Mathis can help you by performing research on a title in order to ensure that it is clean (i.e. devoid of unpaid taxes, fraud, etc.). We offer both basic and extended owner’s title insurance policies, the latter of which protects you against additional liabilities such as forgeries, encroachments, living trusts, and structural damages. Call Mathis Title Company today at (703) 214-4020 or contact us online to learn more about owner’s title insurance.