How important is Title Insurance When Purchasing a Property?
Title insurance is an extra level of protection that applies to anyone purchasing a property. This is because a Certificate of Title, which allows you to legally occupy/own a property, is exposed to unforeseen risks that can limit those rights.
What is Title Insurance?
There are two types of title insurance, the first being title insurance for residential and commercial lenders, and the second being title insurance for existing homeowners. The main purpose of title insurance is to protect anyone with a financial stake in a property from any unexpected risks.
Here, we’ll delve into each type of title insurance in more detail.
Title Insurance for Property Purchasers and Owners
In the event certain information was excluded from title searches and records, such as illegal structures, that can influence your legal rights as a property owner, title insurance is a must.
Payable as a one-time only fee that can be incorporated into your conveyancing costs, and will provide financial protection for a lifetime and has no excess payable on claims, your legal ownership of the property you have purchased will be protected.
Title Insurance In Action
Title insurance might seem like something that’s unnecessary, however, in the event, something does go wrong with your new property purchase, it will provide both financial security and peace of mind.
For instance, one unlucky homeowner found out five months after they purchased their new home that their patio had been constructed without a building permit. In order for them to keep the structure, they would need to obtain a Building Approval Certificate; otherwise, it would need to be removed. The homeowners were given 30-days to come up with a plan of attack and notify the council.
Luckily, the homeowner had title insurance. As such, their title insurance provider arranged for a building surveyor to conduct an inspection. This inspection revealed that the patio had been poorly constructed with low-quality materials that meant it didn’t meet the required specifications.
The insurance provider then had new plans drawn up and employed a builder to construct a new patio and garden bed retaining wall. The total cost of this work was $18,000. The claim for this work was approved, as it fell under the ‘illegal building works’ coverage that was included as part of the title insurance policy, which meant the work was completed at no extra cost to the homeowner.
If they didn’t have title insurance, the homeowners would have had to shoulder this unexpected expense themselves.
Ask Vicki Philipoff Settlements how you can add title insurance coverage as a one-off payment to your conveyancing costs today!
