Why You Should Not Own Property Without Title Insurance
To better understand the importance of Title Insurance – and why you should employ a Jurado & Farshchian attorney who specializes in title work – it helps to know what title is, why it must be protected, and how a Title Insurance policy can help.
Understanding TitleWhether you purchase a property or inherit one, your ownership and right to use it comes down to one thing: whether there is a signed and recorded deed that conveys, or transfers, title to the property from one party (the grantor) to you (the grantee). Without this legal document, your right to the property is effectively nonexistent. (There are certain exceptions to this, such as when a property is a homestead (i.e., primary residence) and you obtain title to it via operation of the law.)
That is because title represents the sum total of your collective legal rights over the property, such as the right to reside there and use it. Buying, inheriting, or otherwise owning a property really means having title to it. Moreover, just as the physical property can have defects, issues, or potential hazards that must be insured against, so too does the title to said property, in the form of unpaid taxes, legal judgments, liens, unsatisfied mortgages, errors in the public records, and much more.
These and other title hazards can impact your ability to make full use of the property, and can even challenge your right to own it. They will also be your problem to handle whether you knew about them or not. The legal and financial repercussions can be dire if you do not take the necessary precautions to protect your right to the title to your property.
How Does Title Insurance Work?You should never take ownership of a property without having a title company or real estate attorney conduct what is known as a title examination, which is basically a search for any and all known issues with the property's title history. However, even if the title examination finds that the title is clear of any known problems, this does not mean there are not hidden issues that are not publicly recorded, and can thus emerge unexpectedly in the future. That is where Title Insurance comes in. It protects against any number of these hidden hazards, from defective title records to forged deeds and cases of fraud.
If any sort of claim is made against the title to your property, your Title Insurance policy will defend against it, up to and including the legal costs. Even if the claim proves valid, your Title Insurance will protect your right to ownership by bearing the costs of settling the case. Unlike other types of insurance, your premium is paid only once, before you take title to the property.