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Title Insurance

The Real Estate Closing

The purpose of a closing for a real estate transaction is the transfer of title from buyer to seller. To accomplish this, a sales contract must be signed, the necessary funds must be collected, and documents executed and recorded. In many cases, an owner and/or lender’s title insurance policy is issued.

Closing transactions in Florida may be conducted by a title insurance agent, notary, and/or attorney. These individuals facilitate the closing process and hold your funds in escrow until its time for disbursement.

What is Title?

Title is the ownership basis of real estate and represents your legal right to use, control, possess, and transfer possession of the property. “Clear Title” refers to a person’s ability to transfer title of a property freely without being beholden to any other party.

There are many circumstances which may inhibit a party from transferring their ownership of a property, such as unpaid property taxes, a lien (such as a mortgage or an unpaid debt arising from certain kinds of work done to the property), or an easement. This is not an exhaustive list by any stretch.

Determining if a person possesses “Clear Title” to a property (or how they can transfer the property despite any title defects) is a difficult process that should only be undertaken by professionals. If done improperly, property can be erroneously transferred without resolving the defects, which can render the new or previous owners liable to civil suit. Therefore, many people obtain Title Insurance in order to protect themselves.

Role of Title Insurance

Title Insurance protects you and/or your lender from old claims, rights, and debts others may have to the property. There are two types of title insurance available for purchase – lenders and owners policies.

  • Lenders policies which are often required for financing, protect the lenders interest in the home’s title.
  • Owners policies provide insurance for the owner of the new property against the previous owners liabilities.

Prior to issuing a title insurance policy the title agent will conduct a title search, review its results, and inspect for potential defects such as liens or easements. However, thorough searches still are not guaranteed to uncover every defect. These defects present a risk to your free and clear ownership of the property. Title insurance protects you against these risks.

If after purchasing property, if your title is challenged, your title insurance will defend your title and pay the costs of doing so, including losses that may result.

Role of the Title Agent

Your title agent will:

  • Obtain and prepare title searches
  • Inspect and review the title
  • Prepare closing documents
  • Prepare and issue title insurance
  • Supervise the closing
  • Disperse funds

Benefits of choosing a law firm/attorney to handle your closing

By choosing to have a law firm handle your closing, you receive the benefit of having an experienced and knowledgeable lawyer involved in your closing. The attorney at Oldham & Delcamp can assist you in working through the real estate closing process, advise on the intricate contracts, and handle communication among parties.

Commonly Used Terms

  • Clear Title refers to title which is free from any defects that would preclude the owner’s right of peaceful enjoyment of the property or cause the owner to lose possession and/or control of any portion of the property.
  • Closing Documents refers to title which is free from any defects that would preclude the owner’s right of peaceful enjoyment of the property or cause the owner to lose possession and/or control of any portion of the property.
  • Closing Disclosure is a document prepared that discloses how funds will be distributed by the title company, such as to pay transfer taxes, recording fees, and to pay any companies who preformed work in order to ensure the closing could occur (such as a municipal lien search, a survey, or a title search). In cash only transactions, a HUD is produced but fulfills the same purpose.
  • Earnest Money Deposit is a sum of money deposited by the buyer in a transaction to demonstrate their earnest desire to purchase the property.
  • Easement is the right to use another person’s property for a specific purpose. It does not grant legal title to the property but does another a person use of the property. For instance, a property may have an easement that allows an adjacent property access to a public road.
  • Lien is an official claim or charge against a property or funds for payment of a debt or an amount owned for services rendered. Several different kinds of lien exist, but the most common ones in real estate are contractor’s liens or a mortgage.
  • Municipal Lien Search is a search preformed by the Title Agent in an attempt to locate any liens that have been recorded against the property.
  • Property Encroachment occurs when a person’s property extends into the property of another. For instance, a fence may have been put up by a neighbor that exceeds the boundary of their property. Other types of encroachment may arise from bushes and shrubbery, decks, or sheds.
  • Easement is the right to use another person’s property for a specific purpose. It does not grant legal title to the property but does another a person use of the property. For instance, a property may have an easement that allows an adjacent property access to a public road.
  • Simple Escrow is a closing where title insurance is not being issued.
  • Title Commitment are documents which act as a title insurance binder.
  • Title Defect are legal issues caused by adverse and/or conflicting interests that get in the way of determining a property’s true owner and the authentication of that title. Title defects result from improperly recorded ownership or the transfer of ownership between two parties.
  • Title Search refers to the gathering of title information from the official records and typically results in a compiled list of all previous official records affecting title of the property for sale.

Call to Discuss a Potential Title Insurance Case

For a free consultation with one of Oldham Delcamp’s top-rated title insurance lawyers, call us today at 727-201-5458 or fill out our form!  We can help as your slip and fall lawyer, DUI law and auto accident attorney.