Why it is important for you to have title insurance?
Hi, I am Kate Felluca, an attorney at Evans Fox. If you have ever owned real estate, “title insurance” may ring a bell. This video breaks down what that is, and why it is important to have it.
In the realm of real estate, “title” refers to the legal right to ownership of property. It is transferred from seller to buyer by a deed.
It is standard to perform certain due diligence prior to closing, to ensure transfer of clean title. This includes reviewing an abstract of title, which sets out the history of the property as shown in public records, including deed transfers and any encumbrances, such as mortgages and easements. This also includes obtaining an instrument survey map, which outlines the property’s boundaries and the location of any improvements, such as a house or building, a driveway or a parking lot. The attorneys will work to address any title issues that are identified during the course of this due diligence.
Title insurance then affords financial protection against any title defects that existed, but were not revealed, prior to closing. Indeed, even with the most thorough review, there are occasions when hidden title hazards later crop up.
If you are obtaining a mortgage, your lender will require you to purchase a lender’s title insurance policy, which will protect your lender (but not you) against title defects that would affect the value its security interest in the property. As buyer, you will have the option of purchasing an owner’s title insurance policy, which will protect you and your financial investment against title defects for as long as you have an interest in the property.
Your attorney will facilitate obtaining these policies for you. You will pay a one-time premium at closing. Title insurance premiums are regulated in New York State (set by the Title Insurance Rate Service Association, Inc. (“TIRSA”), in cooperation with the New York State Department of Financial Services), so your cost will the same irrespective of who obtains or issues the policy.
My colleagues and I bring a lot of experience and quality to our title work. It would be our pleasure to help you with your real estate ventures.