Why You Should Have Owner's Title Insurance
These are just some of the hidden title risks that would not be disclosed by even the most meticulous title search, but are covered by an Owner's policy of title insurance:
Title may have been transferred through a foreclosure sale when all foreclosure statute requirements were not met. Notice may not have been given to a concerned party, or the prior property owner could have declared bankruptcy. Some of these situations can result in a foreclosure being rescinded.
Forgery and/or Fraud
Someone signs your name to a document without your knowledge or consent, or a person pretending to be the property owner executes documents.
Wills in the Chain of Title
An heir not named in a Will comes forward after closing. There could be heirs born after the will was executed. A Will may not have been properly probated, or it could have been misinterpreted.
Incorrect Legal Descriptions
Errors made in a prior deed can continue forward for years to come. Metes and bounds legal descriptions are especially problematic.
Misrepresentation of Marital Status
Depending on the transaction, the signature of a spouse could be necessary to properly convey property. The validity of a divorce can also cause a title claim.
Problems with Public Records
There could be confusion due to similar or identical names. Incorrect tax data may have been furnished which could result in a tax sale. Incorrect indexing of the land records could result in a lien against real property being missed, and there have been clerical errors in recording legal documents. It’s also possible that unsatisfied claims are not shown in the public records.
Undue influence was placed on a grantor of a deed. The grantor in a deed could be mentally incompetent, or title may have been transferred by a minor. The Deed was never delivered, or the Deed was delivered after the death of a grantor. A Deed was executed under an expired or false power of attorney.