Only a clear Marco Island real estate title guarantees home ownership — but large percentage of property titles in Florida still have issues that have to be resolved before a buyer can declare ownership, free and clear.
Why is it so important to have a defect-free title? And why buy title insurance to protect against defects? A clear title gives you the peace of mind of knowing that you are the sole owner of your home — period.
An owner’s title insurance policy will cover the costs to defend a homeowner from an attack against the title, and will either pay to clear up the problem or pay valid claims against the property.
Unlike health, fire and other types of insurance that protect you from something that might happen in the future, title coverage protects against something that might have already happened.
Title insurance only covers title issues. The policy won’t cover everything that goes wrong with a house after the sale, only those relating to the title and ownership. Title insurance has nothing to do with leaky roofs or basements.
In many cases a buyer will see a line item for “title insurance” during closing, but often this is a lender’s policy protects only the lender. And the seller’s policy only covers the time he maintained an ownership interest.
Ownership rights in new subdivisions where there have been few previous owners are not protected unless individual owners have policies of their own, even if the builder had the title evaluated when he bought the property before groundbreaking.
Other things buyers should know about property titles include:
• Defects can be subtle. A property title can be clouded by a range of rights and interests, mortgages, liens for unpaid taxes or special assessments, judgments against current or previous owners, use and occupancy restrictions, even mineral and air rights. But there are also a number of hidden defects that may not even surface during a thorough title search, including: a lost or forged deed, a married seller who represents himself or herself as single, claims of undisclosed heirs, impersonation or forgery, clerical errors by courthouse clerks, incorrect legal description of property, contracts signed by minors or mentally incompetent persons, improperly probated will, or confusion of title resulting from similar names.
• Know the “exceptions” to your title. As part of the title search, all title exceptions will be listed. These are situations where the title owner relinquishes control over a given aspect of the property, such as a shared driveway. There is a specified amount of time allotted if you care to object to these exceptions; the seller also has time allotted to resolve these issues. If buyer and seller are unable to resolves the conflict, the buyer can renege on purchase contract.
• If defects are found, you have options. A title search involves learning the legal history of a Marco Island property. This is done by researching the public records to disclose the previous owners of record, prior deeds, mortgages, court judgments, proceedings, divorces, foreclosures, tax and construction liens and other things that can affect title. If a title search reveals obvious defects before you have closed the deal, you can ask the seller to undertake legal proceedings to clear them up. Or, you can withdraw from the deal.
Your Marco Island real estate attorney can also answer any questions you may have about your property’s title, and what to do if defects are found. In many cases, your Marco Island real estate attorney can issue your title insurance, and is therefore well-versed in your particular situation. Since your ownership rights must be legally protected, a person trained in the complexities of Marco Island real estate law is best qualified to issue your owner’s title insurance policy.
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