Owners title insurance is an elective expense when purchasing or refinancing real estate. It can be bought once by an owner and will cover title issues for the entire time that they own the home. Knowing what title defects include may help homeowners decide whether to purchase a policy. Examples of title defects in Needham MA can be found below.
Definition of Title Defect
Title problems are not common but they could have a dramatic impact when they do exist. Defects are situations that make it difficult to determine the legal owner of a property. Although a title exam is performed in most purchase transactions, some problems are not easily found and therefore can be overlooked for several years and through several title transfers. Any known defects must usually be removed before the completion of a sale, but in instances where they are not detected, title insurance can protect the buyer of the property.
Examples Of Title Defects
Title defects come in a wide range of scenarios. Below are just a few examples (although this will differ by insurance company).
- Missing Parties
- Unreleased Liens
- Missing Releases
- Failure to Follow Correct Recording Rules
- Unrecorded Easements
- Undisclosed Heirs
- Forged Documents
- Mental Incompetence of a Signing Party
- Name Confusion
- Incorrect Legal Interpretations
Why Buy Owners Title Insurance
If you purchased title insurance, the insurance company will either resolve the issue or cover your losses from it. It may even cover defending a law suit threatening your ownership rights. Policies are purchased based on a specific value, so maximum limits do apply. Additionally, certain items can be excluded from your policy. Ask your closing representative for a comprehensive list and for more information on examples of title defects in Needham MA. In the End, owners title insurance is the best way to protect your ownership rights to a home. Even though the cost can be high, it is assessed only once and remains effective for as long as you maintain ownership. It is well worth the expense given that real estate may be the biggest single investment that you make.