When you purchase a home, you are buying the property with all of its history, good or bad. The title to the property is what gives you the right to occupy and use the space. Title may be contested based upon past rights and claims asserted by others. These claims can be costly to defend, may lead to the loss of your property and usually can be prevented by using a qualified real estate attorney to research and review the title prior to purchasing the property.
A title search is a detailed examination of the historical records related to the property. The search includes the deeds, recorders office records, tax records, property and name search, and other documents associated to the property. The purpose of the search is to verify the seller’s right to transfer ownership, verify that past mortgages have been satisfied, determine if any mortgages exist, and to discover any claims, defects and other rights and burdens on the property.
What If a Title Defect is Found?
A title search can find various defects, including a lien from a previous construction project, a mortgage that was not satisfied, or other encumbrances and restrictions, which include unpaid taxes, unsatisfied mortgages, judgments against the seller and restrictions limiting the use of the land.
Does the Title Search Reveal Every Problem?
No, a title search usually only reveals problems that were recorded. For instance, if the previous property owner constructed an addition to the property which was never permitted and does not show up on the title search which the new owner may have to demolish in order to be in compliance with the city building code. Another example could be where the previous owner incorrectly states his or her marital status which results in a possible claim by a legal spouse forcing the new property owner to defend his rights.
Title insurance is the policy that protects the new homeowner and the mortgage holder against loss if problems arise, even a “hidden problem” which results in a claim against you and your ownership. Title insurance pays for your legal defense if someone makes a claim, pays court costs and related fees. If the claim proves to be valid, title insurance will reimburse you for your actual loss up to the face amount of the policy.
How Much Does Title Insurance Cost?
A title insurance policy is based on the purchase price of the property. Title insurance is not a yearly fee, its a one time fee when you first purchase your property and will appear as part of your closing costs. The cost or premium is based on the purchase price multiplied by an amount which is regulated by the state as follows:
- Up to $100,000 = $5.75 per thousand (current regulated rate)
- Over $100,000 = $5.00 per thousand (current regulated rate)
- Example – $100,000 = $575.00; 200,000 = $1,075
For more information regarding title insurance and rates, please contact us now.
Who Pays for Title Insurance
In Florida, it varies per county who customarily pays for title insurance but it can be negotiated in the contract. In Miami-Dade County, Collier, Sarasota and Broward, the buyer normally pays for his own title insurance and chooses the escrow, title and closing agent, in Palm Beach County, the seller traditionally pays for the buyers title insurance.
Contact Our Coral Gables Professional Attorneys
To discuss your case with one of our experienced lawyers in an initial consultation, call us toll free at 305-461-4880 or contact us online.
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