Why You Need Title Insurance

Why you as a property owner should have title insurance is confusing to most people. Simply put, title insurance will help resolve “clouds” on the title of a property that you own. To transfer property, you must provide clear title; if there are unresolved issues (clouds) you are responsible for rectifying the situation, even if you had nothing to do with it.

Many buyers don’t understand the value of title insurance and how it can help in the event of an unforeseen issue. As we speak, we have a gorgeous new equestrian farm styled home in Alpharetta sitting on eight acres….and a title issue. It seems that well into the past there was an unresolved transfer of the larger original parcel, and now it’s back in the picture. The owners elected not to purchase title insurance and resolving this issue is going to cost about five times the cost of a policy.

This is actually seen more than you think. Atlanta has grown at such a fast rate that areas that used to be nothing but farms and woods are now gridlocked. Alpharetta, Canton, West Cobb, Cumming, Jasper…all looked quite different thirty years ago. As large tracts of land were purchased and developed, heirs and even co-owners were sometimes long forgotten or unable to be found. Suddenly Billy surfaces and where the farm used to be is a 600 home development. Guaranteed that after Billy settles down he calls a lawyer.

So why get title insurance when you purchase your home? Consider this:

  • A fire destroys only the house and improvements. The ground is left. A defective title may take away not the only the house but also the land on which it stands. Title insurance protects you (as specified in the policy) against such loss.
  • A deed or mortgage in the chain of title may be a forgery.
  • A deed or a mortgage may have been signed by a person under age.
  • A deed or a mortgage may have been made by an insane person or one otherwise incompetent.
  • A deed or a mortgage may have been made under a power of attorney after its termination and would, therefore, be void.
  • A deed or a mortgage may have been made by a person other than the owner, but with the same name as the owner.
  • The 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.
  • A deed or mortgage may have been procured by fraud or duress.
  • Title transferred by an heir may be subject to a federal estate tax lien.
  • An heir or other person presumed dead may appear and recover the property or an interest therein.
  • A judgment or levy upon which the title is dependent may be void or voidable on account of some defect in the proceeding.
  • Title insurance covers attorneys’ fees and court costs.
  • Title insurance helps speed negotiations when you’re ready to sell or obtain a loan.
  • By insuring the title, you can eliminate delays and technicalities when passing your title on to someone else.
  • Title insurance reimburses you for the amount of your covered losses.
  • A deed or mortgage may be voidable because it was signed while the grantor was in bankruptcy.
  • Each title insurance policy we write is paid up, in full, by the first premium for as long as you or your heirs own the property.
  • There may be a defect in the recording of a document upon which your title is dependent.
  • Claims constantly arise due to marital status and validity of divorces. Only title insurance protects against claims made by non-existent or divorced “wives” or “husbands.”
  • Many lawyers, in giving an opinion on a title, protect their clients as well as themselves, by procuring title insurance.
  • Over the last 24 years, claims have risen dramatically.

We’re happy to fully explain what title insurance is and why is pays to purchase it when you close with us. This is money well spent and it will provide peace of mind to you while you own your home.

 

Scott G. Mills, Attorney
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Mills & Associates
137 Johnson Ferry Road
Marietta, Georgia 30068
Phone: 770-874-1988
Fax: 770-874-1989