Owners title insurance can be bought when buying or refinancing real estate. It can be bought once by an owner and will guard against title issues for the entire time that they own the home. Knowing what title defects include may help buyers decide whether to purchase owners title insurance. Definition of title defects in Melrose MA can be found below.
Definition Of Title Defects
Title issues are not typical but they could have a dramatic impact if they do arise. Defects are conditions that question the legal owner of a home. Even though a title search is completed in most purchase transactions, certain problems are not easily found and can stay hidden for many years and through multiple transfers of ownership. Any found issues must normally be removed before the completion of a sale, but in cases where they are not known, title insurance can protect the buyer of the real estate.
Examples of Title Defects
Title defects come in a wide range of scenarios. Below are just a few examples (although coverage can differ based on the insurance company).
- Missing Signatures
- Unknown Liens
- Unfiled Transfers
- Failure to Follow Correct Recording Procedures
- Unrecorded Encumbrances
- Undisclosed Heirs
- Mental Incompetence of a Party
- Mistaken Identity
- Incorrect Legal Interpretations
The Importance of Title Insurance
If you bought an owners title insurance policy, the insurance company will either address the problem or reimburse you for losses you incur. It could even cover defending a law suit threatening your ownership rights. Policies are purchased based on a particular value, so coverage limits do apply. Also, certain issues can be excluded from your policy. Ask your closing agent for a complete list and for additional details on definition of title defects in Melrose MA. In the End, title insurance is the best protection of your ownership rights to a property. Although the cost can be significant, it is paid only once and remains effective for as long as you own the real estate. It is certainly worth the expense given that real estate may be the largest single investment that you make.