1. What is title?
The title is proof of ownership of property, giving its owner the right to use said property however they see fit. The title is transferable, meaning you can legally transfer ownership of the property to others.
2. What is title insurance?
Title insurance can provide protection to owners in the event that there are claims against the owner’s right to the title. Unlike other kinds of insurance, it protects the insured against events that may have happened in the past. For example, a contractor who made developments on your property on behalf of a prior owner may make a claim against your property if the prior owners never paid off the balance. This is known as an imposition of a contractor or mechanic’s lien and acts as a way to secure payment by making the property’s title unclear. If the lien was undisclosed and undiscovered prior to closing, legally, it becomes your responsibility to pay off the lien in order to convey a clear title for when it is your turn to sell the property. Having a policy with us ensures that you are protected not only against undisclosed liens but many other types of claims as well.
3. Do I need Title Insurance?
While you are not legally required to have title insurance when you purchase a property with cash, if you plan on getting a mortgage, most banks require you to have a lender’s policy (loan policy), which provides protection for the lender in the event that there is any adverse claim against the title. Most lenders require a loan policy when you take out a loan with them in order to make sure their interest in the property is protected, as that property acts as collateral to secure repayment. In order for you to protect your own interest in the property, experts highly recommend that you obtain an owner’s policy.
4. Can you explain the types of claims or risks covered by title insurance?
The coverage of risks and claims under title insurance extends far beyond the risks that may be caused by error or negligence by the person performing the search and examination. Standard coverage handles risks such as:
*Lack of understanding of misinterpretation of wills or other legal documents.
*Forgery and impersonation.
*Forged deeds, mortgage release, etc.
*Deed not signed by a necessary party (co-owner, heir, spouse, corporate officer or business partner)
*Instruments executed under a fabricated or expired power of attorney.
*Delivery of deeds after death of the seller.
*Outstanding interest due to a life estate, undisclosed or missing heirs.
*Lack of competency, capability, or legal authority of a party.
*Recorded prior mortgages or other liens that were undisclosed or undiscovered.
*Recorded but undisclosed easement or use restriction.
*Lack of “right of access.”
*Purchase of real estate through a foreclosure sale when requirements of foreclosure have not been strictly met.
5. What is the cost of title insurance?
The cost of title insurance depends on the purchase price of the property. It is paid only once, at the time of purchase. From then on, the coverage continues so long as you hold interest on the property. Title insurance also extends to heirs automatically, in the unfortunate event of the owner’s demise.
6. Does the lender’s title insurance not protect me?
Not necessarily. There are two types of title insurance. The lender requires insurance for the amount of its loan through which the lender maintains a valid enforceable lien on the property. In the event of an adverse claim, the lender ordinarily would not be concerned unless the loan becomes nonperforming and the claim threatened the lender’s ability to foreclose and recover its principal and interest. In the event of such claim, you, as the owner, have no provision for repayment of legal expenses. An owner’s policy, on the other hand, offers you that protection. Purchasing your own policy for only a small expense can bring you peace of mind.
7. At what stage should one look into purchasing title insurance?
It’s a good idea to contact Providence Abstract, LLC immediately after you are out of attorney review. Once you provide us with some basic information, our team of title experts will obtain a report from the county and other agencies to prepare a title report. Our team requires sufficient time in order for us to discover all we can about the property. As there are a number of steps that must be taken to ensure a comprehensive title report, it is vital that we are contacted as soon as possible.
8. Is title insurance negotiable?
Title insurance rates are regulated in the states of New Jersey, Pennsylvania, and New York. One should always explore his/her options.
9. What is a title report?
A title report is a compilation of important elements that affect the marketability of title. This includes the current ownership easement, restriction liens, tideland and any such matter that needs to be addressed to insure the title. The report is prepared by title agencies prior to clearing and is submitted to all parties involved in the transaction.
10. What is a title abstract and what are the steps taken to clear and close?
It is an examination of the county records on a specific property, going back at least 60 years, performed by a professional, known as a title abstractor. The abstractor compiles various legal documents such as deeds, mortgages, wills, tax maps, etc., to establish a chain of title on the property. This chain of title reflects the transfer of property from owner to owner (in the past 60 years) up until the current owner. The title abstract and the chain of title need to be examined in order to convey a clear title. In order to achieve this, the examiners look at all surrogate court documents, trusts, and checks in connection to the property described. Attempts are made to verify that all prior mortgages are paid, that all open judgments are not imposed upon the individuals of the transaction, and that there has been no violation of the property’s boundary lines (encroachments). Our closers/ settlement agents coordinate with both buyer and seller attorneys to resolve any outstanding issues in order for us to confidently issue your insurance.
11. Do I need a survey?
Title insurance does not cover certain defects such as principle encroachments, boundary line or property corner defects. A professional surveyor can provide a comprehensive report, comprised of important information such as dimensions of the property, boundary lines, as well as any easements or encroachments that have been made on your property. A land survey is necessary as it is vital that most of this information is reflected in the title to prevent possible financial loss.
12. If the seller has title insurance on the property, why do I need it when I’m purchasing the house from them?
A title policy insuring the seller does not protect you against a number of instances that may have occurred since the seller purchased the title insurance. For example, there may be an increase in the value of the property, which calls for additional coverage. There may be new liens, judgments, or unpaid taxes that the seller is responsible for. If these were disclosed after the closing, legally, they would become your responsibilities. Having a title policy of your own will keep you protected if such events were to occur.
13. What is a RTF (Realty Transfer Fee)?
The realty transfer fee refers to the cost for the recording of the legal transfer of the property in a real estate transaction.
Please visit http://www.state.nj.us/treasury/taxation/lpt/rtffaqs.shtml for complete information on New Jersey’s real estate transfer tax.
14. What is the bulk sale law?
The bulk transfer law dictates that if the buyer provides prior notice to the seller’s creditors that they are purchasing the seller’s assets in bulk, then the buyers are not liable to pay the seller’s debts.
Please visit detailed information on the bulk sale law and the procedure for filling out the C-9600 form.