Title insurance is an essential part of the real estate transaction process. It provides protection for both homebuyers and lenders against any unforeseen issues that may arise with the property’s title. While title insurance aims to offer peace of mind, there are still instances where claims need to be made. What are some of the most common title insurance claims in Washington State?
Boundary disputes:
Boundary disputes are one of the most common title insurance claims. These disputes can arise when the property’s boundaries are not clearly defined or accurately marked. A discrepancy in property lines can lead to legal battles, and title insurance can help cover the costs associated with resolving such disputes.
Liens and encumbrances:
Another common title insurance claim involves liens and encumbrances on the property. Liens are legal claims against the property for unpaid debts, such as unpaid property taxes, contractor’s liens, or unpaid homeowner association fees. When these issues become known after the purchase, they can be costly to resolve. Title insurance can step in to help cover the expenses.
Forgery and fraud:
Title insurance also provides protection against forgery and fraud related to the property’s title. In some cases, individuals may attempt to sell a property they do not legally own or manipulate the title records. Title insurance can help safeguard your investment in case you unknowingly purchase a property with a fraudulent title.
Errors in public records:
Mistakes can happen, even in government records. Errors in public records, such as incorrect property descriptions, misspelled names, or inaccurate legal descriptions, can lead to title disputes. Title insurance helps protect you from the financial consequences of such inaccuracies.
Undisclosed heirs or missing heirs:
Sometimes, the true ownership of a property may not be fully disclosed during a sale. Undisclosed heirs or missing heirs can emerge years later, claiming rights to the property. Title insurance can provide coverage in case such claims arise, ensuring that your ownership remains secure.
Easements and right-of-way issues:
Easements and right-of-way issues can complicate property ownership. If there are existing easements that weren’t disclosed during the sale, or if neighboring properties have rights to access part of your land, it can create disputes and financial liabilities. Title insurance can help cover the costs associated with resolving these issues.
Clerical errors or omissions:
Clerical errors or omissions in the title documents can have significant consequences. These errors may include missing signatures, incorrect notarization, or incomplete legal descriptions. Title insurance can provide protection in case such errors result in legal challenges.
Previous owners’ unpaid debts:
Title insurance can also protect you from previous owners’ unpaid debts that could lead to a lien on the property. For example, if the previous owner owed child support, spousal support, or unpaid taxes, these debts could become a lien on the property, affecting your ownership rights.
Title insurance is a crucial safeguard for property buyers and lenders in any real estate transaction. While there is a cost this insurance, it offers peace of mind by protecting against common title issues and claims that can arise during property ownership.