The Title to real estate is a state of being generally created by the filing of legal documents in the Public Records . This is not to be confused with the title to a car, boat or mobile home which is generally tracked by a single agency and evidenced by a single piece of paper, the title. Rather a real estate title is the evidence, of the right(s), that a person or other entity has to the ownership, possession and/or use of land. It is possible that someone other than the person representing himself to be the owner may have a legal right to the property. If that right can be established, this person can claim that right and make demands on the owner as to its use.

Any number of problems that remain undisclosed after even the most meticulous search of public records can make a title defective. These hidden “defects” are dangerous indeed because you may not learn of them for many months or years. Yet they could force you to spend substantial sums on a legal defense, and still result in the loss of your property. Among these are fraud and forgery, yes Virginia it does happen, matters or survey, improperly conducted court proceedings, missing heirs, construction liens, and so on.

In addition and perhaps more importantly is the probability of human error through mis-indexed documents, technical errors on documents, bad legal descriptions and the like.

Basically your Owner’s Title Insurance Policy protects you from covered losses for as long as you or your heirs own an interest in the property or are obligated under Warranties of Title you have given for that property. The period of time covered ends with the effective date of the policy which brings to light one of the basic differences between title insurance and most other forms of insurance. That is title insurance covers against events which happened in the past as opposed to casualty insurance which insures against losses suffered due to future events.    

Run that by me again.
Let’s say you buy auto insurance last week and a tree falls on your car this week. The effective date of the policy was from last week forward and the tree fell this week during the period covered. Bingo, you have coverage.

Generally, a title policy covers events which occurred at or prior to your effective date but which do not become apparent until after the effective date. For instance, you buy a home and an owner’s title insurance policy last week. This week a lady claiming to be the previous seller’s wife appears at your door wondering why you’re living in her house. It turns out the wife at closing who signed your deed was the seller’s girlfriend and forged the real wife’s name. Assuming you weren’t in on it, Bingo, you are covered because the claimed interest arose prior to your effective date (the real wife never signed the deed) and you still hold title.

Pretty mind bending actually but there are a couple of things an educated consumer such as yourself should be aware of regarding title insurance premiums in the State of Florida.

1. If you are selling an existing home within 3 years of purchase look for your prior owner’s title insurance policy and give us a copy so we can apply a reissue credit.
2. If you are selling vacant, unimproved land look for your prior owner’s title insurance policy and give us a copy so we can apply a reissue credit.
3. If you are refinancing any time after purchase look for your prior owner’s title insurance policy and give us a copy so we can apply a reissue credit.
4. If you are refinancing with your current lender and the existing mortgage policy insures that lender you may qualify for an even greater credit called the substitution loan rate.
5. If you are refinancing with ANY lender and the existing mortgage balance and the new mortgage balance both exceed $250,000 you may also qualify for the substitution loan rate.
6. If you are closing on the first sale of a previously unoccupied dwelling there is a possibility the “New Home Discount” may apply so tell us so that we can apply it if the requirements are met.
7. Unless we did the closing from which a reduced rate arises we cannot know it exists. In addition the Real Estate Settlement and Procedures Act, RESPA, requires that the settlement statement accurately reflect the disbursement of funds. Therefore we must be told if there is a possible credit due prior to closing. Once the transaction is closed with information available at that time it can’t be changed under RESPA.