Frequently-Asked Questions
It’s an insurance policy--protecting against loss should the condition of title to land be other than as insured. When you buy a home, or any property for that matter, you expect to enjoy certain benefits from ownership. For example, you expect to be able to occupy and use the property as you wish, to be free from debts or obligations not created or agreed to by you, and to be able to freely sell or pledge your property as security for a loan. Title insurance is designed to cover these rights you bargain for.
Examples
Standard coverage handles such risks as:
- Forgery and impersonation;
- Lack of competency, capacity or legal authority of a party;
- Deed not joined in by a necessary party (co-owner, heir, spouse, corporate officer, or business partner);
- Undisclosed (but recorded) prior mortgage or lien;
- Undisclosed (but recorded) easement or use restriction;
- Erroneous or inadequate legal descriptions;
- Lack of a right of access; and
- Deed not properly recorded.
An extended coverage policy may be requested to protect against such additional defects as:
- Off-record matters, such as claims for adverse possession or prescriptive easement;
- Deed to land with buildings encroaching on land of another;
- Incorrect survey
- Silent (off-record) liens (such as mechanics' or estate tax liens); and
- Pre-existing violations of subdivision laws, zoning ordinances or CC&R's.
Subject to availability in your locale, First American's EAGLE Policy covers all of the risks listed above, plus:
- Post-policy forgery;
- Forced removal of improvements due to lack of building permit (subject to deductible);
- Post-policy construction of improvements by a neighbor onto insured land; and
- Location and dimensions of insured land (survey not required).
Construction of a new home has the potential exposure to unique title pitfalls that may impact the lender and owner.
You may think you are the first property owner when you are constructing or buying a newly built home. However, there were most likely many prior owners of the unimproved land. A title search will uncover any existing liens and a survey will determine the boundaries of the property you’re purchasing.
In addition, a builder may have failed to pay subcontractors and suppliers. This could result in the subcontractor or supplier placing a lien on your property.
Since your lender wants to be sure the property has clear title, they will require that a Loan Policy of Title Insurance be purchased. But a Loan Policy only protects the lender. By purchasing an Owner's Policy of Title Insurance, you will be protected from covered threats to your title and ownership that went undiscovered at the time of closing.
Best of all, your Owner’s Policy provides this coverage for as long as you own your home!
Make sure you have a valid government issued Identification Card, Funds to close either wire transfer or cashier’s check payable to the Title Company/Attorney; If using a Power of attorney it must be by state statue and approved by the title company/attorney/lender; all parties that will be appearing on the Deed must be present at closing or is using Power of attorney once approved that person who was given POA must be present at closing with valid ID; make sure you have the hazard insurance and if paid the settlement company will need a copy of the declarations page and the paid receipt , if applicable;
In most cases the Buyers Lender prepares the final CD with the assistance of the Title Company/attorney. It is the lender’s legal responsibility to provide that to the buyer 3 days prior to closing. The CD will tell you how much you need to bring to closing.
It is Maryland Law that the buyer has the right to choose their own representation for closing (ie., Title Company/attorney)
Although most lender’s do require a survey, however they do require the Settlement Company/attorney to remove any survey exceptions from the Lender’s final Title Insurance Policy which is a Policy that insures the Lender in the lien position on the title to the property. In order to remove said exceptions a survey becomes an requirement. Typically a House Location Survey which cost from $250.00 up depending on the lot size.
The lender's policy covers only the amount of its loan, which is usually not the full property value. In the event of an adverse claim, the lender would ordinarily not be concerned unless its loan became non-performing and the claim threatened the lender's ability to foreclose and recover its principal and interest. And, in the event of a claim there is no provision for payment of legal expenses for an uninsured party. When a loan policy is being issued, the small additional expense of an owner's policy is a bargain.
Whereas Owners Title Insurance Policy protects the title to the property as long as the individual owns the property and/or name is still on the Deed.
Owners is an insurance policy--protecting against loss should the condition of title to land be other than as insured. When you buy a home, or any property for that matter, you expect to enjoy certain benefits from ownership. For example, you expect to be able to occupy and use the property as you wish, to be free from debts or obligations not created or agreed to by you, and to be able to freely sell or pledge your property as security for a loan. Title insurance is designed to cover these rights you bargain for.
Examples
Standard coverage handles such risks as:
- Forgery and impersonation;
- Lack of competency, capacity or legal authority of a party;
- Deed not joined in by a necessary party (co-owner, heir, spouse, corporate officer, or business partner);
- Undisclosed (but recorded) prior mortgage or lien;
- Undisclosed (but recorded) easement or use restriction;
- Erroneous or inadequate legal descriptions;
- Lack of a right of access; and
- Deed not properly recorded.
An extended coverage policy may be requested to protect against such additional defects as:
- Off-record matters, such as claims for adverse possession or prescriptive easement;
- Deed to land with buildings encroaching on land of another;
- Incorrect survey
- Silent (off-record) liens (such as mechanics' or estate tax liens); and
- Pre-existing violations of subdivision laws, zoning ordinances or CC&R's.
Subject to availability in your locale, First American's EAGLE Policy covers all of the risks listed above, plus:
- Post-policy forgery;
- Forced removal of improvements due to lack of building permit (subject to deductible);
- Post-policy construction of improvements by a neighbor onto insured land; and
- Location and dimensions of insured land (survey not required).
Ownership is taken when the Deed is signed by the seller and delivered to the buyer. Recording the deed if a formality to show ownership for public record and so that the chain of title with respects to ownership and mortgage loan liens, etc.. can be properly filed.
An abstract of title, or title abstract, briefly summarizes the various activities affecting ownership of a parcel of land. When a person or business agrees to purchase real
estate, that person or business arranges for an examination of the history of the property's title. This examination is known as a title search. A title search is conducted to determine that the seller of the property in fact owns the property and has a free-and- clear title. A free-and-clear title has no clouds on it, which means that no person or business other than the seller has an interest in, or claim to, the property.
The process of determining the precise ownership of a piece of land by searching an abstract is complex and laborious. Often, the title abstract does not contain every transaction or proceeding that may affect ownership of the land. The search conductor, or abstractor, usually a trained professional, must verify that the abstract is complete by reviewing the abstract to insure it is correct, checking for gaps in dates , judgments, tax liens and ensuring that a proper legal description appears with each entry.
1, To determine the location, boundaries, area, or the elevations of land and structures upon the earth's surface by means of courses in relation to the North Star, and the measuring of angles and distances by using the techniques of geometry and trigonometry.
2, The map or plat drawn by a surveyor which represents the property surveyed and shows the results of a survey.
- Un-released mortgage’s
- Prior owners liens, mortgage’s judgments, etc.
- Forgery and impersonation;
- Lack of competency, capacity or legal authority of a party;
- Deed not joined in by a necessary party (co-owner, heir, spouse, corporate officer, or business partner);
- Undisclosed (but recorded) prior mortgage or lien;
- Undisclosed (but recorded) easement or use restriction;
- Erroneous or inadequate legal descriptions;
- Lack of a right of access; and
- Deed not properly recorded.
- Off-record matters, such as claims for adverse possession or prescriptive easement;
- Silent (off-record) liens (such as mechanics' or estate tax liens);
