It is customary for anyone engaged in a real estate transaction of almost any kind to purchase title insurance. Thankfully, most people never wind up needing it, but when it becomes necessary, it can save a great deal of legal and financial difficulty. But what exactly is title insurance, and why might you need it for your real estate transaction?
What is Title Insurance?
In simple terms, title insurance is like any other insurance policy, in that you buy it to help protect against the risks of a potential disaster. However, instead of protecting you against the risk of property loss during a fire or flood, you get it to protect you in the event that something goes wrong with your real estate transaction. More specifically, it protects against the risks of an unforeseen title defect, which can impair your transaction and result in a serious lawsuit.
What Sorts of Issues Does Title Insurance Protect Against?
Title insurance helps to protect you against any one of several title defects that may arise during the process of conducting a real estate transaction. This includes, but is not limited to:
- Unpaid mortgages or liens
- Unpaid property taxes
- Undisclosed easements or covenants
- Errors in public records
- Disputes over property boundaries
- Disputes over survey data
- Undisclosed heirs
- Forged or fraudulent documents
- Previously undiscovered will
What Happens if You Do Not Get Title Insurance?
If you do not get title insurance for your real estate transaction, you place yourself at risk in the event that a title defect does arise. This is an issue because even due diligence is not always sufficient to uncover potential defects, meaning there is always some risk that one of these issues appears. If that happens, you will be paying for the costs of any ensuing litigation out of pocket.
What Should You Do?
Fortunately, real estate lawyers with experience handling transactions like yours can help you to obtain a title insurance policy that covers your needs. That way, you can focus on finding and getting the best deal possible, rather than worrying about potential legal issues. The sooner you contact them, the sooner they can get to work on your behalf.
At David J. Lorber & Associates, PLLC, we assist clients throughout New York who are looking to buy or sell real estate. We will guide you through the process and help you minimize your legal and financial risks. Call us at (631) 750-0900 or contact us online to schedule your Free consultation at our Setauket office.
Recent Comments