Florida Title Insurance Services
Generally, title insurance is a type of insurance policy used by homebuyers and lenders that provides protection against financial loss resulting from defects in your ownership rights that were unknown to you at the time you purchased or refinanced the property and obtained title insurance such as undisclosed liens, judgments, forgeries, failure to pay property taxes, fraud, and other title defects. Title insurance is typically used to insure “fee simple” ownership. Essentially, if a covered claim arises after you purchase the policy, then the title company will either defend the claim or pay you for covered losses up to the limits of your policy.
What does Title Insurance cover?
While title insurance is different from other types of insurance, such as automobile and life insurance, there are certain similarities: Title insurance is very specific as to certain matters that are covered and also matters that are not covered. For example, the following are types of matters that may be covered by title insurance:
A lien that was filed in the public records because a previous owner failed to pay a mortgage, a judgment lien, property taxes, special assessments, or any amounts due to a condominium or homeowners association;
A lien that was filed in the public records for labor and materials furnished by a contractor without your consent;
Leases, contracts, or any options on your property that were not recorded in the public records or otherwise disclosed to you;
Any undisclosed restrictive covenants affecting the use and enjoyment of your property;
Any undisclosed and unrecorded easements not otherwise apparent on your property;
A deed or other document(s) in your chain of title that was not properly signed, notarized, delivered, or recorded due to an error by a notary, clerk, or prior owner;
A deed or other document(s) in your chain of title is invalid because of a forgery, fraud against the rightful owner, invalid power of attorney, a signature given under duress, or a signature by a person otherwise legally incompetent to sign it;
A title defect arising from an improper prior foreclosure of the property;
Any ownership claims by undisclosed or missing heirs;
A deed signed by an entity that has been administratively dissolved or is no longer operational, or one that did not have the proper authority to sell the property;
On the other hand, the following are types of matters that may not be covered by title insurance:
Defects in title which is created after the title policy has already been issued;
Defects in title which are created by your own doing;
Defects in title which you had knowledge of;
Problems that arise because of your failure to pay your mortgage;
Problems that arise because of applicable state, county, city or other municipal laws or restrictive covenants that were disclosed to you prior to the title insurance policy being issued; and
Title insurance may not protect against fire, flood, theft, or any other type of property damage or loss (it is advisable to review your title insurance policy for such coverage).
How does Title Insurance differ from other kinds of Insurance?
Most insurance functions as a risk assumption through that arise out of some unforeseen future events, such as auto insurance (automobile accidents) or life insurance (death). The purpose of title insurance is to protect against financial loss caused by a defect or defects in the title to real property that occurred in the past which may result in a claim on a future date. Title insurers search countless records to determine whether or not there are any adverse claims on the real property being purchased or refinanced before the closing on the purchase or refinance. In the event that there are any adverse claims, the claims are either eliminated before the title insurance policy is issued or those claims are excepted from the title insurance policy.
Do I need Title Insurance in Florida?
The decision of whether or not to obtain title insurance is one only you can make. However, owning a home is typically the biggest investment a person makes in their lifetime. Therefore, it only makes sense to obtain title insurance to protect your biggest investment! Additionally, if you are going to be obtaining a loan for your purchase, your lender typically will require you to obtain title insurance before loaning you money. However, in other cases, the obligation of requiring a buyer to obtain title insurance can be negotiated between the parties and spelled out in the purchase and sale contract.
In considering whether or not to obtain title insurance, you should consider the following:
If you are going to operate a business on your property, what would you do if there is a deed restriction prohibiting you from using the property for commercial purposes?
What would you do if you found out after you purchased the property that the property was built over an easement and the property had to be destroyed?
Do you have the time, effort, money and patience to litigate a title dispute?
What if you are unable to sell or borrow money against the property later on because there is a defect in the title to your property?
How long does my Florida Title Insurance last?
Your title insurance policy will remain in effect for as long as you and your heirs own the property.
Who pays for Title Insurance in Broward County or elsewhere in Florida?
While the person who is responsible for paying for title insurance is typically always spelled out in the purchase and sale contract, this is also something that can be negotiated between the seller and the buyer. Oftentimes, if the seller is going to pick the closing agent then the seller is going to be responsible for paying for the title insurance. On the other hand, if the buyer is going to pick the closing agent, then the buyer is going to be responsible for paying for the title insurance.
How much does Title Insurance cost?
The cost of title insurance is a mathematical calculation that is based on the sales price of the property. In certain circumstances, there may be additional charges to a basic title insurance policy that may be either required or requested by the buyer or the buyer’s lender. Keep in mind that paying for title insurance is not like other types of insurance, such as auto, medical or life insurance; when you obtain title insurance, it is a one-time expense that is paid when you purchase the property. Additionally, title insurance rates are regulated; therefore the cost of obtaining a title insurance policy will be the same no matter which Title Company is issuing the title insurance policy.
When do I get Title Insurance?
Title insurance is given only when closing on the property that is covered by the title insurance. Typically, the title agent will order a title commitment (the foundation by which the title insurance policy is based on) prior to the closing to allow the parties involved time to resolve any title problems that might have been discovered by the title commitment.
I am getting a loan for the purchase of the property. My lender is requiring me to obtain a mortgagee policy. Will a mortgagee policy protect me?
Obtaining a mortgagee policy when you purchase property is more for the protection of your lender, not the buyer. A mortgagee policy only ensures that your lender has a valid and enforceable lien against your property. If a situation were to happen where a covered title defect is found that the title company cannot “cure” or fix and you end up losing your property, a mortgagee policy will pay out to your lender, not you. Additionally, a mortgagee policy will not cover matters that do not affect the validity and enforceability of the certain liens, for example, restrictive covenants that limit your use and enjoyment of the property.
Can I (or should I) just do my own title search?
Of course you can, however it is not advisable unless you are sure you know what you are doing, such as an experienced title examiner. An experienced title examiner knows how to examine all relevant public records, such as deed, mortgages, bankruptcy filings, court judgments, tax records, liens, maps, wills and divorce decrees. It is not an easy job and it can be very labor and time intensive process. Another thing to consider is that title insurance can provide protection against certain legal defects, such as a forged signature or a legal document signed by a minor, which may be extremely difficult to determine from merely examining documents in the public records. Lastly, if a title examiner missed a defect that is covered by your title policy, you can make a claim for it under your title policy. However, if you choose to perform your own title search and fail to discover the same defect that the title examiner missed, you are out of luck.
If the seller has owned the property for many years, does that automatically mean that the title is good (and clean)?
The short answer is not always. In some cases, a wrong legal description, a forged deed, and other title defects may take years to be discovered. Other possible title issues can involve certain liens, including tax liens or judgment liens that may not have been discovered while the seller has owned the property.
If the seller who is “flipping” the property bought Title Insurance, does that mean title to the property is good (and clean)?
Not always. It only take a few seconds for a lien to be filed against the property and recorded in the public records of the county in which the property is situated. Moreover, the title policy that covers the seller’s property terminates as soon as he or she sells the property. Thus, if you do not get title insurance yourself, close on the purchase and sale on the property, and later discover a title defect that the former owner’s title company missed, then you will not have a claim.
Does Title Insurance provide any benefit to the seller?
Yes. Typically, a seller makes certain warranties and representations to the buyer in the purchase and sale contract, including a warranty and representation that it is conveying clear title to the buyer. If it turns out after closing that the seller did not have clear title the buyer may potentially sue the seller for breach of warranty, even if the seller had no way of knowing that a title defect existed. One of the most common ways for a seller to be protected against this type of claim is to provide a buyer with Title Insurance in exchange for the buyer’s acceptance of a type of deed which limits the seller’s liability. If a covered title claim arises after the purchase and sale has closed, the buyer will then look to the title company for any recovery; the buyer will not be able to look to the seller for recovery absent any intentional misconduct or fraud.
My real estate agent has told me that the title to the property that I am buying is clean. Can I rely on this?
The short answer to this is a resounding “No”. This is exactly why you need an attorney-owned and operated title company such as Elevation Title & Escrow Services with a combined experience of over a quarter century to assist you.