Title insurance coverage allows buyers to have peace of mind knowing that they will be excused from any legal disputes that may arise in connection with prior ownership or improper document filing.
When asked about title insurance, it may seem like another number added on to the vast amount of paperwork, but you aren’t too sure what it even is. When purchasing property, whether that be a home, land, or commercial, the buyers are purchasing the right, title and interest in the property. Sometimes title may be clouded by claims and rights asserted by others. This is where Title insurance comes into play. This type of insurance protects against these types of hazards.
At Western Nevada Title Company we care about our clients, so we always start with a title search. A title search involves a thorough examination of public records to confirm who has legal ownership of the property, if there are any liens against the property, and if there are any potential conflicts that could negatively impact the property owner in the future.
A good deal of property title searches will turn up nothing, but there are a few issues that could delay or even derail the ownership process all together. Here are some common issues that a title search could uncover:
1) Problems with the boundary lines- It is important that both parties know exactly
what they are buying and selling. No one wants to buy (or sell) property that does
not in fact belong to them. A thorough examination of all boundary lines, surveys,
and other applicable materials is imperative in a Title search.
2) Bankruptcies- If the seller has declared bankruptcy at some time, the bankruptcy
could potentially extend to the new owners. If a bankruptcy does pop up in a
search, the new buyers would be made aware and could proceed as they see fit.
3) Liens or judgements on the property- Sometimes a lien on the property can be as
simple as a mortgage. Other times, a property owner may not be the most
financially responsible person and can take on debt that puts further liens onto the
property. If property was bought without Title insurance and there was a lien that
had not been taken care of by the previous owner, the new owner would be
responsible for paying those amounts. A Title search would show all recorded
judgements and liens to make both buyer and seller aware. Learn More
4) Other owners- A Title search will show exactly who the rightful owners are. If
someone else has a right to the property that the sellers were not aware of, then that
person could make a claim on the property and either stop the sale or put a
hinderance on the process.
5) Easements on the property- An easement is a right given to another party to use a specific piece of property for their own purposes.
It may be a utility easement for a utility company to access their equipment. Other times it could be for a neighboring parcel to have access to their property. A Title search would show if there are any easements and where they would be located. If someone were to infringe on those easements then there could be potential disputes among both parties and money lost if a structure were to need to be moved because it was built on the easement.
6) Divorce Edicts- Sometimes in a divorce, assets can end up being split and things
can get messy. Sometimes the seller may have lost part (or all) of the property in
the divorce settlement. It is very important that the person selling is the one who
has the right to do so. When a Title search is performed, all pertinent documents
are examined to verify the correct people are signing and giving their permission to
prevent a stalling in the sale.
So if the title search doesn’t pop up with any outstanding claims or potential issues, why purchase Title insurance? It is still very important to have an “in case” policy. Sometimes it is years before an issue can rear its ugly head. There could be a mistake in the ownership history, an unknown heir could make themselves known, there could have been fraud or forgery, missed liens etc. If those scenarios become reality, then there will be at the very least legal costs, and in a worse case scenario loss of the property and the money put into it.
Title insurance provides protection for as long as you are on title. It simplifies the transfer to new buyers and helps all parties involved to sleep better at night knowing their property is being protected.
Learn more about WNTCO and our team, and make sure