We have the 19th-century expansion of the American frontier to thank for the creation of title insurance. As the debate over land ownership became epidemic, Title insurance protection became necessary. Settlers became unsure of whose land they were cultivating, and this led them to seek methods of mitigating the risk of their property becoming embroiled in lengthy litigation.
Today, property buyers use title insurance protection in a similar method. Unlike other insurance products on the market, title insurance protects you from actions that have already happened but are not yet discovered. If you’re planning on investing in real estate in Florida, purchasing title insurance can provide you with many benefits.
1. Receiving a Payout
The most straightforward way title insurance protection benefits you is by recouping your investment. You’ve already paid money out to purchase a piece of property. If for some reason, you find that you are no longer the rightful owner, you can make a claim to your title insurance company. Depending on the terms of your policy, the insurance company will pay you for your loss.
This is contingent on the loss of the property and the circumstances surrounding it. Your compensation will vary based on whether you’ve experienced a complete loss or now suffer from a clouded title that reduces the value of the property. While you may not have the property, at least you are financially made whole again and are able to invest in another piece of real estate.
2. Get Your Land Back
You could contract to purchase a particular piece of property. After the sale completion, you find out that the previous owner has already sold a 50-foot strip of land along one side to the neighbor. Now your property is smaller than you contracted for.
Your title insurance can purchase that strip of land from the neighbor and convey it to you. This would make you whole again. You can then continue with your investment plans for the property.
3. Litigation
If the neighbor in the previous example refuses to sell, the insurance company may decide to litigate. In this situation, a claim for the property would be brought on your behalf. Then each side would argue why they have a right to the land.
Your title insurance company may also represent you in litigation brought about by someone else. If someone brings an ownership claim against you, your insurance will defend your right to the land.
Litigation is expensive, and paying for it out of pocket could potentially eliminate any potential growth value or profit that you would receive from the investment property.
4. Debt Liability Avoidance
It’s common practice for contractors to place a lien on a property while performing services. Then the lien is lifted when the property owner completes full payment for the contractor’s services. A lien can also be placed on the property for unpaid taxes.
Purchasing title insurance protection insulates you from liability should you discover a lien claim against your property. These are debts incurred by the previous owner. Protection from the debt of others insulates your investment growth possibilities.
5. Document Correction
Mistakes in documentation can happen. Perhaps someone put incorrect information on a document or filed it in the wrong location or database. Title insurance protects you from these past mistakes.
The insurance company will work with you and the local agency to file the corrected documents in the right location for proper recording of your ownership. With the correct information officially recorded, you are free to lease or sell your investment property.
Have Assistance With Purchasing Title Insurance Protection
Purchasing title insurance protection is just one of many pieces of the puzzle. Investing in real estate is more complicated and sophisticated than purchasing your next family home. Working with a skilled attorney will ensure you make the best legal decisions for your investment.
Schedule an appointment today and have competent, experienced and responsive legal counsel looking out for your best interests.
