Title searches, title reports and title insurance all work together to protect buyers and their interests during real estate transactions.
When buying a home, there are a lot of things that can go wrong. From the seller learning they don’t actually have the right to sell the property, to missed deadlines and forgotten repairs, we’ve heard it all.
The answer to these risks is title searches, title reports and title insurance. You’ll need to know their uses and benefits, so you can protect yourself. Without these protections in place, you risk being left liable or with a property that is far from the one you dream of.
What Is a Title Search in Florida?
A title search is a process of searching public records to identify and confirm a property’s legal ownership. Title searches examine many documents including deeds, land records, court judgments and deeds.
Who Can Perform a Title Search?
Title searches can be completed by individuals, but it’s highly advised against due to the heavy consequences of any mistakes. Instead, you should use an experienced title company or Florida real estate attorney who will have access to all public records and local offices. Using a professional will prevent you from long, tedious and costly searches.
How Long Do Title Searches Take to Complete?
Title searches usually take from around 10-14 days to complete, but older properties with many previous owners may take longer.
Why Are Title Searches Needed?
Title searches are needed to ensure that the property’s title is ‘clean’ – which means having it’s free from ownership uncertainties, liens or discredits.
If you were to buy a property with a ‘dirty’ title, then you could find yourself in all manners of legal fights, from strangers claiming they own the property, or erroneous surveys and unresolved building code violations. If you were to buy a property with liens on it, you could also be stuck with the original owner’s debts.
Title searches are also vital to reveal whether the current owner has paid all their property taxes. If they haven’t, you could end up having to foot their outstanding tax bill.
What Is a Title Report?
A Title Report is a document that outlines the key legal detail and status of a property, found during the title search.
Why Are Title Reports Needed?
Title reports are needed to ensure buyers know what they are getting and that the title is not dirty.
What Information Is Included in a Title Report:
Title reports contain many crucial details about the property including:
- The legal owner of the property
- If there are any liens or encumbrances
- Any past disputes regarding ownership
- The legal description of the property
- Border dispute
What to Look Out for On a Title Report?
If you receive a title report, you should be wary of the following potential red flags:
- Public record and administrative errors
- Outstanding liens on the property
- Encumbrances that suggest a third party has interest or liability on the property
- Falsified documentation
- Estate plans that reveal an unknown heir or will are attached to the property.
- Property disputes, such as public surveys revealing property boundaries are different to what was promised.
- Falsified identity
- Violated building codes
How to Get a Title Report in Florida?
You can get a title report for the property you’re looking to buy by yourself, but it can be a costly mistake to not use a professional.
Title reports are complicated and extremely important. They act as a summary of information about the property. The language used can be complicated and easy to misinterpret. We highly advise that you use a reputable and experienced Florida real estate lawyer.
Your real estate lawyer will go to the local courthouse or County Assessor and access the information available on local property, this is called the ‘Title Search’ as described above.
Unless you are trained to understand and navigate records without error, you should leave this to a professional.
Your lawyer or title company will then provide you with the Title Report. By working with an attorney, you won’t need to try and understand this document yourself, as the lawyer will interpret everything so you can rest easy knowing you’re protected from buying into a property with threats of ownership!
What Is Title Insurance?
Title insurance protects lenders and homebuyers from financial losses caused by defects in a property’s title. Title insurance protects against claims for past occurrences.
What Types of Title Insurance Policies Are There?
There are two types of title insurance:
- Lender’s title insurance
- Owner’s title insurance
Lender’s Title Insurance
As a buyer, your lender will usually require that you purchase a lender’s title insurance policy to protect them from any events where the seller cannot legally transfer the title of ownership or mitigate any claims to the title that may surface unexpectedly. Lender’s policies only protect the lender.
Owner’s Title Insurance
Despite the use of title searches, owners are still at risk of financial loss so the seller may be advised to buy the Owner’s title insurance policy.
Owner’s title insurance is purchased for the property’s new owner, to protect the buyer against title defects. It is usually an optional but wise purchase.
It may also be wise to buy owner’s title insurance once you own the property, as you pay down your mortgage. That’s because if a claim comes up, you’re at risk of losing significant amounts of money.
To decide what is best for you, talk to a Florida real estate lawyer.
Why Is Title Insurance Needed?
Title insurance is needed to protect home buyers and lenders against any loss or damage caused by title defects, liens or encumbrances with a property’s title.
For example, title insurance claims are often filed against:
- Back taxes
- Conflicting wills
- Incorrect signatures on documents
- Ownership by another party
- Flawed records
- Unrecorded easements
- Outstanding liens and lawsuits
How Do I Purchase Title Insurance in Florida?
An escrow or closing agent such as a Florida real estate attorney can help you get title insurance after the property purchase agreement is complete, from either a U.S. title insurance policy underwriter or a regional title insurance company.
Title insurance usually costs between $500 to $3,000, depending on the insurance provider used and the price of the property. It is purchased at closing for a one-time fee.
If you have a title insurance issue or claim issue, please contact our Florida title insurance lawyers for a free consultation.
What Are the Risks of Not Having Title Insurance?
If you have no title insurance, then you risk leaving the involved parties to face damages for any title defects. For example, if as a buyer you find out after closing that the previous owner had unpaid taxes, then you would have no protection and instead, have to pay it yourself. Title insurance also protects buyers for as long as they own the property.
Title Search, Title Report and Title Insurance Compared
While all different, title searches, title reports and title insurance policies should be used together. Without one another, you risk putting yourself and other parties at risk of large financial loss. Here is a summary of the three:
|Title Search||Reveals title defects and ownership history so the buyer knows what they’re getting.||Buyer|
|Title Report||Document stating the legal ownership and details of a property and any known title defects||Buyer|
|Title Insurance||Protects parties from financial loss and damage, in the event title defects and judgments arise or have arisen.||Buyer, Seller and Lender|
Contact Our Florida Title Insurance Lawyers
If you’re buying a property and need a title search, title report or support with title insurance, our Florida real estate lawyers can help.
We have vast experience in helping Florida residents and businesses navigate the complexities of title defects and can help ensure you’re protected during your dream sale.
Our St Petersburg and Riverview real estate attorneys at Battaglia, Ross, Dicus & McQuaid, P.A. will review your circumstances and ensure your transaction goes smoothly.
Contact us today to schedule a free consultation.