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How may title insurance protect against potential issues?

On Behalf of | May 3, 2021 | Title Insurance Litigation

A title search typically uncovers a property’s current and prior owners. It can also disclose any unpaid taxes or judgment liens filed against it. You may decide to not purchase a property if its title presents a potential problem. It could also present an opportunity to negotiate a lower price to compensate for the cost of a title insurance policy.

Errors, mistakes or forgeries, however, may remain unknown until years after the closing. While title insurance generally protects lenders financing real estate, you may wish to consider an additional owner’s policy that continues to protect you after the sale, as explained by

What legal issues could arise after a clear title search?

If a property’s prior owner gave permission to a neighbor to access it, a title search may not reveal the undocumented easement arrangement. Without a written right-of-way, you may not know, for example, that an adjacent business owner has permission to allow customers to park on your property.

Unknown or missing heirs may present a will and claim ownership of the property you rightfully purchased. Forged documents that otherwise appeared legitimate may initiate a legal action requiring you to expend valuable financial resources on maintaining your right to ownership.

How may I protect myself from title problems?

The internet has made it possible for dishonest individuals to obtain a property owner’s private, personal and financial information. If you wish to increase your property’s protection against title fraud or theft, a New Jersey insurance carrier may provide an option.

Search results can show if a title is “clear” or free of liens. The results may not, however, disclose potential issues — such as boundary line disputes, errors or fraudulent documents — that could require a legal action. The right title insurance policy may bring increased protection for both you and your lender.