Having Clear Title to Property and Title Insurance
When you spend your hard earned money buying a property, whether it is a starter home or retirement home, you want to be absolutely certain that you own that property free and clear. Simply paying for the home or having the deed or mortgage in your name is not enough to ensure complete ownership. Without a clear title of ownership, other parties can lay claim to rights in your property, including the right to dictate how you use the property, or the right to a portion of the profits if you should ever decide to sell it. If you are buying a home, it is important to make sure the title to your home is free of defects, and mortgage lenders often require borrowers to purchase title insurance.
What is Clear Title to Property?
Part of the process of buying a home is conveying the title of the property from the previous owner to the current owner. Owning a clear title to real estate means that you are the sole legal owner of the property, and have the legal right to use it as you wish and without restrictions. In order to ensure you are getting a clear title, your attorney will perform a title search prior to purchase. Whether you are buying a home from a stranger, family member or a friend, you’ll want to make sure there are no issues with the title you could potentially have to contend with further down the line. A title search is done by checking property records for property you plan to purchase, as well as checking the tax records and researching for any pending lawsuits involving the property or the prior owners. Problems that can arise if you don’t have a clear title include:
- Prior claims to ownership of the property;
- Tax or judgment liens on the property from previous owners; and
- Restrictions, and encumbrances on the property that are conveyed with the title.
Purchasing Title Insurance
Defects in the title to a home you purchase can result in restrictions in your use of the property, potential financial losses in the future, and may even invalidate your ownership in the property. In order to protect homebuyers, as well as their own investment, mortgage companies and lenders often require buyers to purchase a title insurance policy. Title insurance is a form of indemnity insurance, meaning that it covers potential losses stemming from causes that occurred prior to the policy being issued. Title insurance is usually paid as a one-time fee at closing, and it generally covers any financial losses or legal fees associated with problems resulting from undiscovered defects in the title.
Contact Our Experienced Real Estate Attorneys
When buying a home, you want to make sure you will have a clear title, free of defects. At Cavallo & Cavallo, our experienced New York real estate attorneys can help guide you through every step of the home buying process, ensuring your rights, as well as your investment, are protected. We have offices in the Bronx and Westchester, and are prepared to provide efficient and effective legal service to handle all your real estate needs.