Why Do I Need Title Insurance?
When someone wants to invest in real estate, there are quite a lot of details to keep straight, and it is all too easy to forget something you may need. Title insurance can make all the difference in protecting your rights to the property you have just acquired, particularly if the seller is less than cooperative during the sale. While it is usually not required by law in Florida to have title insurance, it is generally a good idea to purchase some, to ensure that its coverage protects you.
Intended To Find Clouds On Title
Title insurance is insurance intended specifically to protect property owners from unforeseen monetary losses due to clouds on the title or any other potential issue that might affect their rights to the property. The state does not generally mandate it, but private lenders may – for example, a bank agreeing to a mortgage will often require the mortgagor to have title insurance, to protect their investment. It is unfortunately more common than one might think for a seller to not disclose potential title defects before a property is sold, and title insurance will protect you as a purchaser.
If you do purchase title insurance, it means that the first task of your insurer will be searching extensively for any hidden issues that might affect your enjoyment of the ownership rights you are intending to acquire. If any are found, the insurer will cover the legal expenses that might be required in order to ‘quiet’ (eliminate) those issues. Issues that cloud title can be anything from a tax lien to a second deed, and they may require quite a bit of work to clear up. Quiet title actions can be very brief, or they may take months to years to settle satisfactorily.
Is My Title Marketable?
In general, an investor should look for a clear title in order to go forward with a real estate transaction. A clear title is a title with no encumbrances like old liens or mortgages on it – but in order to be sold, a title merely has to be marketable, not clear. A marketable title may have encumbrances, such as zone restrictions, but a buyer is legally able to choose to accept the property as-is. It is not uncommon for a buyer to purchase a piece of property with encumbrances, and then seek to remove them if doing so will not be overly burdensome.
If you have not yet closed on your purchase and sale agreement, it is highly recommended to obtain title insurance beforehand. Florida law does require sellers to make many different disclosures with regard to the properties they are selling – for example, if they are aware of “facts materially affecting the value of the property” that the buyer does not or could not know, they must inform the buyer of that information. Encumbrances, however, do not fall under this category; they must be found in most cases, and title insurance can help ensure every issue is discovered.
Contact A Tampa Real Estate Attorney
Purchasing real estate in Florida is a significant endeavor, and it is always a good idea to protect yourself and your rights as well as you can. A Tampa real estate attorney from the Seward Law Office can help answer your questions about your title, and help protect your rights in the event of clouds. Call our office today at 813-252-6789 to schedule a consultation.
