What is Title Insurance?
Purchasing your home is an important decision. But how does one know that the property they purchased has a clear title? Because unknown problems can be hidden in the history of a property's title, homeowners pay for title insurance. Title insurance has two types. One type is the owner’s policy and the other type covers the lender.
Title insurance is an insurance policy that guarantees the property title is free from the problems of hidden liens and claims. Public records for the property are searched to find problems in the title's ownership and history. Possible hidden title problems can include:
Errors or omissions in deeds
Mistakes in examining records
Liens for unpaid taxes
Liens by contractors
Title insurance pays for title companies to search for problems in a property's title by examining public records.
In residential real estate the property boundaries are fairly straight forward. Country property is much more exciting.
Country Property Title Research
It is so cool to go back and find records of easement between old time Sonoma County families. There are recordings of actions such as. “Exchanged four gold coins to cross the lands of…” It is a history fun to explore as well as protect my client’s interests.
Take a good look at the attached image. There are elements to this map that I just love working with. The parcel with the red outline is a property that I have listed on Pine Flat Road. It wraps around a former federal mine. There are roadways with easements crossing the property. Notice the dotted lines that cross the parcel with notes that say Lot 5, Lot 7 and Lot 8. That is an indication that at some point in this properties history it had been subdivided with a record of survey but the lots were not divided. This may have taken place anytime in the past century.
Splitting these lots is much easier and less costly than starting from scratch. Administrative Certificates of Compliance, ACC’s can be purchased at the county once these parcels are perfected. Lot line adjustments can be done prior to recording the new lots and at a cost in the thousands, not tens of thousands.
A Realtor that is a country property specialist is trained to identify challenges. Identifying these early and knowing the course of action will save you lots of time and money during the transaction. There are other specialists that do nothing but this type of work that may need to step in for extra piece of mind or find past work on the property.
In securing a good search on a property's title, title insurance will insure the property owner as long as s/he owns the property. Therefore, if a problem arises at a later date, the title insurance policy will cover legal fees in defense of a claim against the property that is covered under the title policy.