Often property has had a long history leading up to the present day when it’s being sold, and that history involves a chain of many people and documents. However, not all people and documents associated with a property are correctly accounted for in recorded documentation, which poses a risk to the interest in the property to both the buyer and their lender.
That’s where a title insurance policy from your title company comes in – if you bought one. While most lenders require a buyer to purchase a lender’s title insurance policy, a buyer’s policy is optional. As a buyer, you shouldn’t let that stop you. Any one of the risks posed to the lender is also posed to you as the owner. That’s why it’s wise to invest the small amount now to cover yourself if one of the surprises listed below comes to the surface.
What Types of Risks Are Covered?
- Another person owns an interest in your title
- Another party has rights affecting your title arising out of leases, contracts or options
- Another party claims to have rights affecting your title arising out of forgery
- Another party has an easement on the land
- Another party has a recorded right to limit your use of the land
- Another party has a recorded lien or encumbrance on your title
- The true owner of the property has been falsely impersonated
- A deed, release or will has been forged
- Instruments executed under invalid or expired power of attorney
- Undisclosed or missing heirs
- Recorded errors on legal documents
- Misinterpretation of a will
- Deeds by persons of unsound mind
- Deeds by minors
- Deeds by persons supposedly single, but in fact married
- Unmarketable title
- No right of access to and from the land
- Issues arising in the gap between the effective date of the policy and the recording of the deed
- A document upon which your title is based is invalid because it was not properly signed, sealed, acknowledged, delivered, or recorded
As you can see, any number of problems can arise even after the loan has closed and the buyer is now the owner. But there’s nothing to fear when covered by a title insurance policy!
To work with a company you can trust with your title work and title insurance policy, contact Liberty Title today!