Why Title Insurance?
In every real estate transfer the matter of a title examination invariably arises. The home buyer often questions whether title insurance is really necessary, particularly when an examination of the title has been completed by an experienced title examiner or real estate attorney, and the examination of all available title records shows no adverse information which question the marketability of the title. But . . . does an examination of title records necessarily remove all concern for title problems eventually surfacing?
The answer is NO . . . and that is why title insurance exists and why it plays such a basic role in protecting the real estate interests and equity of policy holders.
What Are the Risks?
There are many title troubles that can arise to cause the loss of your property or mortgage investment. Hidden risks, that is title troubles which are not disclosed, even by the most careful search of public records, are the most dangerous. Hidden risks can make your title worthless. Your attorney's examination may be the finest that skill, experience and legal knowledge can produce, but your title may be fatally defective.
Here are some title troubles that frequently occur. You may not discover them when you buy real estate, but months or years later, they can result in the loss of your property or an expensive lawsuit.
- Deeds by persons of unsound mind
- Deeds to or from defunct corporations
- Defective acknowledgments
- Duress in execution of instruments
- Erroneous reports furnished by tax officials
- False personation of the true owner of land
- Forged documents, i.e., deeds, releases, etc.
- Misrepresentation of wills
- Mistakes in recording legal documents
- Surviving children omitted from a will
- Errors in indexing
- Capacity of foreign fiduciaries
- Birth or adoption of children after date of will
- Deeds delivered after death of grantor/grantee, without consent of grantor
- Marital rights of spouse purportedly, but not legally, divorced
- Undisclosed divorce of spouse who conveys as consort's heir
- Deeds from a bigamous couple
- Deeds by minors
- Deeds in lieu of foreclosure given under duress
- Deeds by persons supposedly single, but married
- Administration of estate of persons absent but not deceased.
- Inadequate descriptions on conveyances
- Claims of creditors against property sold by heirs or divisees
- Easements by prescription not discovered by a survey
- Federal condemnation without filing of notice
- Deed of community property recited to be separate property
- Falsification of records
- Undisclosed or missing heirs
- Instruments executed under fabricated or expired Power of Attorney