Title Insurance Claims Examples: 6 Common Title Issues
Property transactions can be complex, with numerous legal and financial details to navigate. Unforeseen issues could threaten your financial security and ownership rights. These hidden risks can result in costly disputes or liabilities long after settlement. This is why it’s important to have title insurance for vacant land or a residential property.
What is title insurance? Title insurance offers a simple yet powerful solution, protecting homebuyers and owners from unexpected problems that could impact their property ownership. With a one-time premium, it provides financial coverage and legal support, ensuring peace of mind throughout your property journey.
This guide will explore real-life examples of title insurance claims to illustrate how it safeguards your investment.
Common Causes of a Title Insurance Claim
When buying property, most buyers are excited about owning a new home or investment, but they often miss the hidden risks that could affect their ownership. Property transactions can be complicated, and even after settlement, unexpected issues may arise, leading to financial loss or legal disputes. These risks can come from factors outside the buyer's control, like errors in public records, unpaid taxes, or boundary disputes.
This is where Title Insurance is crucial, as it provides protection against unforeseen complications that may occur after you take ownership. Whether it’s dealing with fraudulent claims, zoning violations, or outstanding liabilities from previous owners, Title Insurance helps secure your investment.
Being aware of the common reasons for a Title Insurance claim highlights the importance of this coverage.
Here are some of the most common Title Insurance Claims, each posing significant risks to property ownership:
Unpaid Rates and Taxes
Unpaid council rates, land taxes, or utility bills from a previous owner can be passed on to the new owner after settlement due to errors in adjustments undertaken prior to settlement. For instance, a Land Tax Clearance Certificate may not reveal outstanding liabilities, making the buyer financially liable. Title Insurance protects against these unforeseen expenses, helping ensure the buyer is not held responsible for debts they did not create.
Fraudulent Activity
Fraudulent actions, like forged documents or identity theft, can cause disputes regarding property ownership. If someone illegally transfers the title of your home, Title Insurance can cover legal costs to help you regain your ownership rights.
Errors in Property Records
Errors in property deeds, including misspelled names, inaccurate legal descriptions, or unrecorded liens unknown at settlement, can threaten ownership rights. Title Insurance can protect against these mistakes, preventing financial loss for the owner.
Boundary Encroachments
Boundary issues may occur in various circumstances. For example, a neighbour may assert a claim over part of your land, or a survey could uncover encroachments. Title Insurance can safeguard against these disputes by covering legal expenses and financial losses.
Zoning Violations or Restrictions
Zoning errors or unapproved building structures found after purchase can prevent you from using the property as you may have anticipated. If a structure/s on the Land was built without the right council approval, Title Insurance can help cover the financial and legal costs needed to rectify these problems.
Easements and Rights-of-Way
Easements or rights-of-way can affect your use of the property. For instance, a neighbour might have legal access to a portion of your land without your knowledge. Title Insurance provides financial and legal protection to help manage these unforeseen encumbrances.
Allow First Title to Secure Your Property
By choosing a reliable provider like First Title, you receive extensive coverage and expert assistance, all for a one-off premium.
Visit First Title today to find out more about our Title Insurance policies and see how we can help you establish a solid foundation for your property journey. Request cover now.
- Get a Quote: Take the first step toward protecting your property today.
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