WHAT RISKS CALL FOR TITLE INSURANCE PROTECTION?: Real estate has such great value and is so basic a form of wealth that many special laws have been enacted for its protection. As a result, the owner of land has exceeding strong rights…and so do the family and heirs of the owner. But others may have "rights" in the property as well. There are mortgage and leaseholder rights, liens due to unpaid taxes…lien claims to those whom the owners money…mining, oil or air rights… and many others. Anyone who has such a claim is, in a limited way, a part-owner. He or she cannot ordinarily be deprived of their interest except by having the claim settled or released. As a new owner you may know nothing about these risks, but you are still vulnerable to such claims on your property. That's why you need an insurance policy from Security Union Title Insurance Company.
DOESN'T YOUR DEED TAKE CARE OF GIVING YOU CLEAR TITLE?: Not at all. A "deed" is merely an instrument whereby a seller transfers his or her right of ownership, whatever it may be, to you. It is not proof that the person described as the seller is actually the owner. It does not do away with claims or rights others may have in the property. From the deed, you cannot determine what rights, liens or claims may be outstanding against your title.
MY LENDER HAS A MORTGAGE TITLE INSURANCE POLICY ON MY PROPERTY. WHY ISN'T THAT ENOUGH?: Any person or financial institution that lends money on real estate wants that investment protected. Security Union Title Insurance Company provides mortgage title insurance policies to assure the lender that the mortgage is a valid first lien protected against hidden as well as known defects in the title as insured. Such a policy affords the only way a lender can be certain about the title which may be acquired in the event of a foreclosure.
A mortgage title insurance policy protects only the lender's interest in the property, not the current owner. That's why Security Union provides owner's title insurance policies: to protect the owner's interest in a piece of property should a claim arise. Purchasing your owner's title insurance policy at the same time that the lender orders the mortgage title insurance policy can result in cost savings to you.
IS TITLE INSURANCE EXPENSIVE?: The cost of title insurance on any piece of property is very small when compared with the benefit and security it gives. And, there are no annual payments to keep the policy in force. The original premium is your only cost as long as you or your heirs own the property!
IS THE RECORD OF OWNERSHIP OF THE LAND COMPLETE FROM THE FIRST OWNER DOWN TO DATE?: You will probably buy property that has had a number of different owners over the years. The continuous record of all those transactions is called the "Chain of Title," and like any other chain, it is no stronger than its weakest link. Anything wrong with the title of the previous owner may very well affect your title too.
ARE THERE ANY LAWSUITS OR CLAIMS RECORDED AGAINST THE PROPERTY ITSELF?: If the former owner had a new sink installed and failed to pay the bill, the plumber may file a Mechanic's Lien claim. This stands as a claim on the property which you, as the new owner, may have to pay in order to clear your title. Similarly, there may be suits pending affecting the property, foreclosures or bankruptcy actions, or any number of claims or legal involvements which may cloud the title until they are properly settled or removed.
ARE THERE ANY SUITS OR JUDGMENTS FILED AGAINST THE OWNER OF THE PROPERTY?: If a person is sued and a judgment is rendered against that person, any real estate he or she owns may become security for the debt. This means that he or she cannot sell that real estate and deliver a clear title until the judgment is paid, released or otherwise satisfactorily disposed of. Further, other suits filed against the owner of real estate - even though not yet decided - may prevent the sale of the property.
ARE ALL TAXES AND SPECIAL ASSESSMENTS PAID?: Unpaid real estate taxes are a first lien on any real property. If there has been a tax sale or forfeiture or any other objection or protest, it means that there are complications standing in the way of a clear title.
DOES ANYONE HAVE SPECIAL RIGHTS TO THE PROPERTY THAT WOULD LIMIT OWNERSHIP?: Many such things are possible - the right-of-way for a road or power line, an easement for a driveway, air rights, sub-surface rights - any of which may have been sold or granted to someone else by a former owner. If so, there may be restrictions on your use of the land.
IF THE SELLER IS A CORPORATION, IS IT IN A POSITION TO SELL THE PROPERTY?: You may buy a piece of property in good faith from a corporation, only to have the validity of the sale challenged by a stockholder who claims it was not properly authorized by the Board of Directors - or that the company was not empowered under its charter or by-laws to sell the land at all. There are further complications possible if the company is in receivership, or if the firm is being dissolved.