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Title Insurance = Peace of Mind
What is Title Insurance?
What does a Title Company do?
A title company will handle all aspects of a purchase & sale or refinance transaction, including but not limited to title search, exam, preparation of documents, as well as escrow and disbursement of all funds.
What is a Title?
A title is the evidence, or right, that a person has to the ownership and possession of land. It is possible that someone other than the owner has a legal right to the property. If that right can be established, this person can claim the property outright or make demands on the owner as to its use.
Do I need Title Insurance?
Most definitely! Title insurance is a means of protecting yourself from financial loss in the event that problems develop regarding the rights to ownership of your property. There may be hidden title defects that even the most careful title search will not reveal. In addition to protection from financial loss, title insurance pays the cost of defending against any covered claim.
What can make Title Defective?
Any number of problems that remain undisclosed after even the most meticulous search of the public records can make a title defective. These hidden “defects” are indeed dangerous because you may: 1) not learn of them for many months or years after completion; 2) they could force you to spend substantial sums on a legal defense; and, 3) the end result may yet still be loss of one’s property.
How much does Title Insurance cost?
The one-time premium is directly related to the value of your home pursuant to an appraisal or contractual purchase price. The purchase of an Owner’s Title Insurance Policy on property valued at $300,000.00 US would cost the consumer $1575.00. (Please note this charge is determined pursuant to individual state statute and is paid when one closes on a purchase or when otherwise specifically requested.) See table below.
When should I look into purchasing Title Insurance?
As soon as the buyer and seller sign the sales contract and earnest money is delivered. With a brief summary of the details, the title companies team of title experts will begin a search of the public records and issue a title commitment. Because there are a number of steps that must be taken to make certain that we know all we can about the title to your new investment, it is wise to begin the completion process as soon as possible.
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Determining that your rights and interests to the property are ''clear" is the business of a title insurance company. |
For a modest, one-time title insurance premium, you will receive continuous title insurance protection in an amount equal to the purchase price of the property or its current market value. This premium typically includes your "owners" policy as well as the "lenders" policy.
One of the marked advantages of title insurance is that prior to a policy being issued, the title insurance company completes extensive research into relevant public records, maps and documents to trace ownership of the property and determine if anyone other than you has an interest in the property.
Through its research, the title insurance company can usually identify any title problems that may arise and have these problems cleared-up prior to closing.
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Your title insurance owner's policy will describe the property and outline any recorded limitations on your ownership. It will also set forth the title insurance company's responsibilities should any claim covered by the policy terms arise.
Typically your title insurance will protect you from loss:
- if someone contests your title in legal action (the title insurance company will defend the title at no expense to you),
- or if there is a title defect that cannot be eliminated (the title insurance company will protect you from financial loss - up to the amount of the policy).
Here is an appoximate list of Title Insurance Fees (subject to change - not guaranteed accurate or reliable).
House Price is the left column in $ |
Holding Title
Before you reach the closing day, you will want to make a decision as to how you will "hold title" to the property. This decision has legal, tax and estate planning ramifications. Therefore, it may be prudent to consult an attorney or certified public accountant (CPA).
The following information is supplied for informational purposes and should not be relied upon as legal definitions.
Buying Alone
- Sole Ownership
- A single individual who has not been legally married.
- An unmarried individual who was married and is now legally divorced.
- A married individual who wishes to acquire title in his or her name alone. At the time of closing, the spouse of the buyer will be required to specifically disclaim or relinquish his or her right, title and interest to the property.
- Living Trust
A living trust is created while an individual is alive and gives the individual control of the distribution of his or her estate. The individual transfers ownership of his or her property and assets into the trust.
Buying with Others
- Tenancy in Common
Enables each partner in the property to sell, lease or will to his/her heirs that share of the property belonging to him/her.
- Who can take title? Any number of individuals.
- Ownership Division: Any number of interests, equal or unequal.
- Who holds title? A separate legal title to his undivided interest is held by each co-owner.
- Possession: Equal right of possession.
- Joint Tenancy
Property owned by multiple individuals where if one of the owners dies, the remaining owners acquire the share of the deceased owner automatically.
- Who can take title? Any number of individuals.
- Ownership Division: Interests cannot be divided.
- Who holds title? There is only one title to the whole property.
- Possession: Equal right of possession.
- Community Property
Property owned equally between a husband and wife. Each must sign all agreements and documents of transfer.
- Who can take title? Only a husband and wife.
- Ownership Division: Interests are equal.
- Who holds title? Similar to title being in a partnership, title is held in "community."
- Possession: Equal right of possession.
Additional Ways to Hold Title
- Corporation
A corporation is a legal entity, created under state law, consisting of one or more shareholders but regarded under law as having essentially the same as those of an individual. The entity has continuous existence until it is dissolved according to legal procedures. Land owned by a corporation cannot be attached for personal debts or judgments rendered against any of its shareholders.
- A Partnership
A partnership is an association of two or more persons who can carry on business for profit. A partnership may hold title to real property in the name of the partnership with partners having an equal or an unequal interest in the property.
- A Trust
A trust is an arrangement whereby legal title to property is transferred by the grantor (or trustor) to a person called a trustee, to be held and managed by that person for the benefit of the people specified in the trust agreement, called beneficiaries.
Purchasing a Florida property is probably one of the single biggest investment you will ever make. Before closing (completing) on the house, you'll want to know that no other individual or entity has a right, lien or claim to the property.
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