Should I have Owners Insurance?
A real estate purchase is one of the best investments you can make - so be certain to protect your land ownership against possible title problems that can hinder transfer of your real property or make it unmarketable. The purchase of an Owners Title Insurance policy protects your property against defects that occur before the date of the policy and remain undisclosed until some time later. Even the most thorough search of the public records cannot reveal some of these "hidden" hazards.
A one-time premium safeguards your property from actual loss resulting from any risk covered by your policy, up to the amount of the policy, and provides for defense costs also, unless specifically excluded. Title insurance covers title defects such as:
The Hidden Hazards
• Forged deeds, mortgages, satisfactions or releases of mortgages and other instruments.
• False representation of the true owner of the land.
• Instruments executed under fabricated or expired power of attorney (death or insanity of principal).
• Deeds apparently valid but actually delivered after death of grantor or grantee. or without consent of grantor.
• Deeds by persons of unsound mind
• Deeds by minors
• Deeds not properly delivered.
• Deeds which appear to convey title but are really mortgages.
• Outstanding prescriptive rights not of record and not disclosed by survey.
• Descriptions apparently but not actually adequate
• Duress in execution of instruments
• Defective acknowledgement due to lack of authority of notary. (Acknowledgement taken before commission or after expiration of commission).
• Deed of property recited to be separate property of grantor which is in fact community or joint property.
• Deeds by persons apparently single but actually married.
• Deed from bigamous couple-prior existing marriage in another jurisdiction.
• Undisclosed divorce of spouse who conveys as sole heir of deceased consort.
• Undisclosed heirs.
• Misinterpretation of wills, deeds and other instruments,
• Birth or adoption of children after date of will
• Children living at date of will but not mentioned therein.
• Discovery of will of apparent intestate
• Discovery of later will after probate of first will
• Administration of estates and probate of wills of persons absent but not deceased
• Conveyance by heir, devisee or survivor of a joint estate who murdered the decedent
• Deed from Trustees of purported business trust which is in fact a partnership or joint stock association.
• Deed of executor under non-intervention will, when order of solvency has been fraudulently procured or entered.*
• Deeds to or from corporations before incorporation or after surrender or forfeiture of charter.
• Claims of creditors against property conveyed by heirs or devisees within prescribed period after owner's death.
• Mistakes in recording legal documents. (For example, incorrect indexing, errors and omissions in transcribing and failure to preserve original instruments.)
• Record easement, but erroneous ancient location of pipe or sewer line which does not follow route of granted easement
• Special assessments where they become lien upon passage of resolution and before certification or commencement of improvements for which assessed.
• Want of jurisdiction of persons in judicial proceedings.
• Failure to include necessary parties in judicial proceedings.
• Federal estate and gift tax liens.
• State inheritance and gift tax liens.
• Errors in tax records. (For example, listing payment against wrong property.)
• Ineffective waiver of tax liens by tax or other governing authorities repudiated later by successors.
• Corporation franchise taxes as lien on all corporate assets, notice of which does not have to be recorded in the local recording office.
• Erroneous reports furnished by tax officials, but not binding on municipality.
• Tax homestead exemptions set aside as fraudulently claimed.
• Lack of capacity of foreign personal representatives and trustees act
• Deeds from nonexistent entities.
• Interests arising by deeds to fictitious characters to conceal illegal activities on the premises
• Deeds in lieu of foreclosure set aside as being given under duress.
• Ultra vires deed given under falsified corporate resolution
• Conveyances and proceedings affecting right of service men protected by Soldiers and Sailors Civil Relief Act.
• Federal condemnation without filing of notice. (Federal law does not require filing of notice of taking in local recording Office.)
• Break in chain of title beyond period examination of public records where running of adverse possession statute has been suspended. (True owner is incompetent, absent or incarcerated or title is held by the sovereign.)
• Deed from record owner of land where he has sold property to another purchaser on unrecorded land contract and the purchaser has taken possession of premises.)
• Void conveyances in violation of public policy (payment of gambling debt, payment for contract to commit crime or conveyance made in restraint of trade.)
*Not applicable in some states.