What is a Title?
The title to a property is the legal right to own and possess the land. The title is represented by a deed, which is transferred from the seller to the buyer at closing. Unfortunately, business is always more complicated than signing our names and shaking hands. It is possible for someone else to have a legal right to the property, and if that can be proven, that person may be able to claim ownership of the property. Ask about the United Title Affiliates buyer's guide to learn more about the process.
How Could Someone Else Claim Ownership of My Property?
Many things can make your title defective, despite an extensive search and exam to uncover potential problems ahead of time. These defects can show up months or years after you purchase your home. Unfortunately, these defects could be legitimate and cause you to have to defend your property rights with legal measures, which could be extremely costly. We often refer to these defects as a "cloud" on the title, which means that there are problems that make it unclear or cloudy as to legitimate ownership rights, and it is our job to clear them up.
The most common defects are from incorrectly listed marital status, mistakes in the legal description of the deed, or a mistake when the deed is recorded in public records. Creditors may have liens on the property for debts unpaid by the seller, or there could be undisclosed heirs that might have inheritance rights. Other defects, albeit less common, include forgery, errors in tax records, incorrect execution of legal documents by minors or incompetent persons, improper delivery of deeds, and many, many more.
How do I protect myself?
When you purchase a home, the standard Florida sales contract will stipulate the guidelines for title insurance. Typically, the seller will pay for the new owner's title insurance policy. This policy will protect the new owner from the defects mentioned above and many others. This is a one-time policy paid for by the seller as a one-time premium at the closing. There is no annual renewal premium. This policy will provide this protection as long as ownership remains unchanged. The policy is typically delivered to the new owner within 30–60 days after the closing and should be accompanied by your recorded original Deed. These are important documents and should be kept in a safe place.
Additionally, if the new buyer is obtaining financing from a mortgage lender, there is a separate "behind the scenes" process of issuing this lender their own policy. This "lender's policy" will protect the lender in the event the homeowner defaults on their mortgage, causing the lender to foreclose, the policy simply ensures the lender is in first lien position to take superiority in a foreclosure proceeding.
The odds are that your title agent did a thorough job when handling your closing. Therefore, on behalf of all title agents, it is our hope that you never need to utilize your policy. Like all insurance, it is better to have and not need than need and not have. However, there are instructions contained in the policy should you ever need to utilize the coverage.
And we do much, much more... The governing body that licenses title insurance agents is the Florida Department of Financial Services. Under this direction, we are bound by a fiduciary duty to appropriately disburse the funds of a transaction to the deserving parties. The time and workload that goes into a transaction vary depending on its complexity, but at minimum, several hours of manpower go into each and every case. Complex cases can take days or even weeks to finalize. After the closing, there are several hours of post-closing details that must be attended to. The processes that we utilize to see a transaction from start to finish will vary from agency to agency, but the end result will not; the end result is a properly executed and delivered warranted title.
Please get in touch with us to schedule a consultation and see how we can help you with your real estate needs.
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