Homeowner Title Insurance - What Are the Advantages of Having Title Insurance?

Buying a Home

As soon as you accept to pay for a home, there are some legal procedures which you must carry out. But most of these will be done by your lawyer. The duty of care is on your lawyer to take all reasonable steps to verify that the home you intend to acquire is free from any encumbrances or third party rights.

Keep in mind that a situation may come up after you have paid for the home in which a third party is claiming either some rights or interests over the property you have paid for. This is one of the things that may cast doubt on your title to the property. When such occurs, the amount of what you have paid for may be totally or partially lost. You may not even have the option of suing to recover what you have paid. This is the more reason why title insurance is advantageous.

What Form Of Registration Of Property Is Provided By The Torrens Title System?

This procedure of registering property was brought about by Sir Robert Torrens in 1858 in Australia and has been today adopted by so many other jurisdictions such as Iowa. What obtains under this procedure is indefeasibility of title once the property has been registered implying that the right to that property has been protected and no claims to that title can be brought by a third party. Although this procedure is good, there is still much that has to be done in relation to updating the procedure. However, it is always good to take a title insurance to guard against any unforeseen claims by a thirdly party.

Although much of the procedure that obtains in most jurisdictions of the United States is based on the registering of separate documents to transmit property as was done in the olden days, it cannot measure up to what is provided by the Torrens procedure.

Is there a need for title insurance? This is very much in need because a property owner must guard against unforeseen claims by outsiders. If we take the case of property which has been transferred to another who does not have either a legal or equitable interest in that property, we will find out that no redress might be open to the property owner to claim back his or her money. If there are two claims on one property, the rights of the owner who first bought the property will prevail. The equitable maxim 'nemo dat quod non habet', will also come in. This means that you cannot transfer a right to somebody on something which you do not have a right on.

This is just to illustrate the fact that there are usually swindlers when it comes to the issue of transfer of property. The option that may be open to the purchaser of such property is to seek legal redress and this may at times be time consuming. It might even be possible that the plaintiff may not have the money to put up a legal battle against the defendant. This is the more reason why it is always advised to take out title insurance and this will go a long way to pay for the expenses involved in any legal action. This will normally be provided as a condition under the terms of the insurance contract.

The main objective of title insurance is to guard against any unforeseen claims that might arise from a third party. This burden will thus be transmitted to those who have the capability to do so. Keep in mind that if there is no title insurance, the innocent purchaser will always be faced with an uninsured risk on what he or she pays for.