THE HONEST BROKER- THE NEED FOR A TITLE SEARCH
A portion of closing costs pays for a “Title Search”. A title search is an examination of all of the public records to determine whether any defects exist in the chain of title. Recorded documents such as deeds, divorce decrees, wills, and mortgages are included. Florida’s Marketable Record Titles Act limits the search to 30 years. A title search establishes current ownership and claims that affect the title. If there is a gap in the chain, it may be necessary to establish ownership by a court action known as a suit to quiet title. If there are no “defects” in the chain of title, it is deemed to be “clear” and the transfer of ownership is conveyed without defects.
With conveyance of property ownership and possible claims that may arise on the property, title insurance was established. Title insurance is a contract that protects the policyholder to make sure that the title is good and merchantable.
According to Florida law, it is not required but recommended. The title insurance company will defend a lawsuit based on an insurable defect. The title insurance company will pay claims up to the face amount of the policy if the title proves to be defective. Policies do not cover exceptions or exclusions listed in the policy such as unrecorded easements, and liens arising after the issuance of the policy.
There are 2 types of title insurance: “Owner’s title insurance” and “Lender’s title insurance”. Owner’s title insurance is issued for the total purchase price of the property. It helps to protect the new owner against unexpected risks such as forged deed signatures and damages for any defect in the title. It is not transferable. Lender’s title insurance is issued for the unpaid mortgage amount. The lender policy protects the lender against title defects and is transferable.
During the sale of all property, the title company performs the title search for any issues with regard to ownership, claims or flaws in the title. When transferring ownership, it is important for the present owner to produce a “clear and marketable” title to the new owner of the property, anything less than conveying a clear title, can affect the value of the property.
Stay well & stay healthy
Diane Lott, Broker
Owner: Paradise Found Realty
Paradise Found Realty, Inc. of Palm City
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