“Why do I need owner’s title insurance if the attorney has examined the land records?”
The Closing Attorney obtains an examination of the history of the property for the last sixty years from an independent title examiner. The history report shows all recorded instruments affecting the title of the property such as deeds, liens, affidavits, and releases of debt. A tax report is also part of the examination. The attorney’s examination, therefore, is limited to what is discovered from the title examinaton.
Unfortunately, however, no examination of the title, no matter how complete or how expertly accomplished, can protect a purchaser against hidden defects. Common “hidden defects” include:
Forgery: Forgery happens with alarming regularity and usually occurs between relatives. Consider the disgruntled spouse who signs the ex-husband’s or wife’s name to a deed.
The Minor or Mental Incompetent: A deed from a minor or mental incompetent will cloud the title to your home. This will most likely occur in a cash transaction.
Missing Heirs: Missing heirs and vague or incorrectly drawn wills can cause a title defect. Just because a will is of record does not mean it was drafted legally.
Similarity of Name: Some names are common in general and others are shared by multiple family members such as father and son and current and ex spouses. These similarities can cause undetected title defects. For example, a valid lien against a person with a common name may incorrectly reference a property address.
Improper Deeds: Deeds are considered “improper” when they are delivered without the owner’s consent; after the owner’s death; drafted under an expired or improperly drafted power of attorney; a corporate seller conveys without authority; the deed is signed under duress; the deed is not executed according to the laws of the state.
Title insurance can provide coverage up to 150% of your equity to settle any of these, as well as other, hidden defects. The cost of the policy is a one-time fee and is in effect for the period of your ownership for as long as you live.
Neel & Robinson has attorneys on staff who are approved attorneys for: First American Title Insurancen Company, Fidelity National Title Insurance Company, Chicago Title Insurance Company, and Old Republic National Title Insurance Company. We have been an AV rated firm since 1995.
For your convenience:
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