What does “Title” mean?
A title is the evidence or right in which a person has the ownership and possession of land. A defect in title can be any legal right held by someone other than the owner to claim that property or to make demands on the owner of that property.
What is Title Insurance?
Title Insurance is protection offered to the owner and lender against defects in the title of the real estate that is insured. The owner’s title insurance policy guarantees the owner against loss due to defects in the title pursuant to the terms of the policy. Investment in real estate, whether residential or commercial, is quite possibly the most important and expensive investment one will ever make. An owner’s title insurance policy protects that investment. A title insurance policy remains in effect for as long as the owner or his/her heirs retain an interest in the property or have obligations under a conveyed warranty.
How can a defect in title occur?
There are many possible causes of title defects. A few of the most common are:
- Fraud- false impersonation of the real owner(s) of the property
- Documents not executed by all necessary parties such as a spouse, co-owner or legal heir
- Improper or forged deeds, wills, releases and mortgage discharges
- Documents executed by persons who lack the competency or capacity or who are not of legal age
- Documents executed by unrecorded, invalid or expired Powers of Attorney
- Errors in the recorded legal documents such as incorrect descriptions, missing signatures, improper acknowledgments
- Misreading of wills, missing or undisclosed heirs
- Documents not properly recorded.