THE TOP FIVE REASONS WHY YOU NEED OWNER’S TITLE INSURANCE
There are over 100 good reasons why you need Owner’s Title Insurance. There are very few “no-brainers” when it comes to the law, but after doing closings for 15 years, Id say that the purchase of Owner’s Title is definitely one of them. You do not want to buy a home without Owner’s Title. Period.
Why spend money on Owner's Title Insurance?I have my owner personal horror story from when my wife and I bought our home, and without Owner's Title, the consequences would have been an absolute disaster for us. As me for the details any time, and ill tell the story.
But for now, here is a list of what I think are the top five reasons, and I picked them because I've seen a closing turn into a complete mess because of each of these problems.
A Revoked Power of AttorneyA deed or a mortgage may have been made under a power of attorney after its termination and would, therefore, be void.
A document signed under Power of Attorney, in and of itself, invites additional scrutiny. A POA can be revoked at any time, and the grantor can certainly claim that the power was revoked prior to the signing of the deed or mortgage. The records at the Registry would not show this revocation, and there is really no way to check.
Children born after a Will has been signedThe testator of a will might have had a child born after the execution of the will, a fact that would entitle the child to claim his or her share of the property.
Despite how often I harass my clients about this, let's face it, people do not update their estate plans. Oftentimes, when a Will is created, the person sticks it in a cabinet and never looks at it again, figuring that it's a done deal. Well, a Will that doesn't deal with future-born children basically leaves the property open-ended until that child assents or makes a claim. And good luck finding a child that doesn't want to make a claim.
Title Insurance PAYS to fix title problemsTitle insurance covers attorneys' fees and court costs.
Keeping it simple. Who wants to pay an attorney to clear the title? It's expensive and lengthy. Title examiners are human - they make mistakes and miss things. Title insurance will not only pay to fix the issue, but will typically provide a letter of indemnification to the buyer, so that a closing need not be delayed while the fix is being made through the registry or (even longer) the courts.
Deeds or Mortgages signed under Duress.A deed or mortgage may have been procured by fraud or duress.
As someone who has conducted well over 1,500 closings, I can honestly say 've seen it. Sometimes, I can tell that one of the parties just doesn't want to be there, and is being pressured by one of the other parties to go through with the transaction. The worst one I ever saw was a refinance where one of the parties kept getting up from the table and storming out, only to be dragged back by the other party. I asked, over and over, if the person was signed freely and voluntarily, and they kept saying yes, despite my gut feeling. Luckily, it was a refinance, which carried a 3-day cancellation period, and sure enough, they cancelled the next day. But many times, they don't cancel, and later claim fraud or duress.
This can also be an issue with an elderly signor, who can later claim, or his family can claim, that he/she had no capacity to sign, or was pressured to sign. Again, title insurance saves the day.
Eliminates costly delays so you can close on time!By insuring the title, you can eliminate delays and technicalities when passing your title on to someone else.
This is one of the biggies, and maybe I should have listed it first. Clearing title takes TIME, whether it's through the Registry or through the Land Court. If you have to clear the title yourself, or hire a lawyer to do it, your closing is going to be put on hold, no matter how much havoc that wreaks on your life. But if the title insurer undertakes the title clearing, the insurer can issue you a letter, stating what is being done, and that it indemnifies the buyer and his/her title insurer.
ConclusionThis will allow the closing to proceeds as planned, while title is being cleared, rather than waiting until after.
This is the one that happened to me personally, and a delay would have cost my wife and I our deposit, which, at the time, was all the money that we had in the world.
Bottom Line: You need Owner's Title. Buy it. Period.