What is Title insurance?

Title Insurance is an important part of just about every real estate closing. When you purchase real property you must know that you have good and marketable title to the land. Title insurance provides this level of comfort.

The land records in the county where the property is located are searched back for 60 years or more to observe the chain of title or ownership. The legal division in that same county would also be searched for various liens that are either general to the owner or specific in nature to the premises in question. All statutory lien periods are observed, so past owners are also searched for these items.

Once the searches are complete, a title commitment is issued showing any defects in the chain of title, which would affect your good and marketable title. Any liens against the premises would also be cited in the title report. If the premises in question has no defects your title report will show that as well.

Real estate taxes are also searched. A detailed report of all current or delinquent taxes assessed to the premises will be shown. A title company is responsible to make sure that all past taxes are paid at closing. You should take title with only the current taxes open of record.

Title insurance does not cover zoning issues of any kind. Each municipality has standard codes which apply to each parcel of real estate. Items such as Certificates of Occupancy and Building Permits can be found at the appropriate Town Hall. Fire Department records are also searched for potential violations. A title company as standard practice and at the insistance of a designated lender, will provide these municipal searches. They are provided "FOR INFORMATION ONLY" and the title company will assume NO LIABILITY for these searches.

Easements, Covenants, Restrictions, Etc. that are shown in the public land records will be shown in the title report. These items affect the use and occupany of your premises and thus must be carefully considered.

So, What does title insurance insure? It insures the subject property as to it's unique boundary lines and that the premises is free from any encumbrances or liens not shown in the policy and which would have been disclosed in the public record. Title insurance insures your lender that their lien is in first position and that no prior lien would have priority over the First Mortgage.

Always consult your attorney and make sure your title report is carefully reviewed prior to the closing so that you understand this very important coverage for your most coveted possession - YOUR HOME!