As an expert in the field of title insurance, one thing I can tell you is that most homebuyers think they don’t need insurance until something bad happens. But once a problem arises, it’s already too late to get insurance. While you might never use your coverage, buying a title policy can literally protect your most valuable asset against a variety of title defects.
Going Beyond the Concept of Title Insurance
Just the other day, I read about a lawsuit filed by the heirs of a deceased owner against the existing owners of a few properties, including a shopping mall, several homes and businesses. Based on the evidence presented, the successive changes of ownership were accurately established, and the judge ruled in favor of heirs, awarding them all the properties. Existing owners lost the ownership of the properties in question.
What I’m trying to say is that, even though there is a highly unlikely chance that there will be a challenge to a title, title problems may appear. For just several hundred dollars, you can easily eliminate the risk of losing your investment.
Now, coming down to the topic of this post, title insurance is available for condos, just as it is for any other piece of property. Though in a condominium, you don’t own the land, a title policy can protect your rights to your condo against any title problems that may arise in the future.
Title Insurance for Condos: Assessing Potential Implications and Consequences
The previous owner, for instance, may have had a lien or judgment filed against him for unpaid taxes, work done by a contractor or condo fees. Or he might have got divorced, and the divorce decree required him to buy his ex-spouse out of the condo or sell the unit. If he didn’t, and the ex-spouse have filed a suit and received a judgment against him, the ex-spouse still has a right in the condo you bought. In this case, you might not only lose the condo but also need to repay the mortgage you took out to buy the unit in the first place.
If you want to protect your asset against claims that may arise from different title problems, including faulty or forged titles, document defects that affect the classification of the unit as a condo, unpaid assessments and encumbrances, opting for an owner’s title policy is truly worth it.
Applying for an owner’s title insurance policy before buying a condo unit involves a detailed title search that may bring out a series of title defects. When defects are found, the title insurance company issues a detailed report so that you can make an informed decision regarding whether to buy or not buy a piece of property. What’s more, if clouds covered by the policy are presented at a later date, the insurer will defend your rights in court and reimburse you for title-related loss, in accordance with the policy term.
Even if it’s new construction, you should still get an owner’s policy. For instance, if the builder didn’t pay his subcontractors for the work performed, there may be one or more liens placed on the condominium.
But isn’t the lender’s policy enough to protect your investment? To give you a short answer, no. This type of policy only protects the lender’s interest in your unit and remains in effect until the mortgage is paid off. To protect your interest in your condo for as long as you own it, you need to get an owner’s policy.
While I can understand that title insurance may seem like a complete waste of money if it’s never used, without it you might be at the risk of losing your condo and remaining with a mortgage you need to repay. Considering all these, it’s no wonder that more and more people are viewing title insurance as a critical component of real estate transactions. To find out more about how title insurance can protect not only your assets but also your sanity, contact our title insurance experts at Guardian Title and Trust, Inc..