Do I Need Title Insurance When Buying a Home in Florida?
Title insurance is designed to protect real estate buyers, sellers, and lenders from property loss or damage
When you purchase a home in Florida, you’re actually buying the title to the property. Title insurance is designed to protect real estate buyers, sellers, and lenders from property loss or damage they might encounter because of encumbrances, liens, or any other defects in a property’s title.
Title insurance is required in Florida whenever two or more parties enter into a real estate contract to buy a home where a lender is involved. Because it plays a significant role in Florida real estate transactions, choosing the right title company can make all the difference in closing on time and without any last-minute issues.
Munizzi Law Firm provides title services that ensure sellers, buyers, real estate agents, and lenders are fully informed throughout the closing process. We want your home closing experience to be as stress-free and effortless as possible!
What is Title Insurance?
A house title proves the seller or owner has lawful possession of a property. Unlike other insurances such as car, health, and home insurance, which cover future events, title insurance insures against past issues and occurrences. Instead of monthly or yearly payments, it’s acquired with a single premium payment, with coverage in effect for so long as the policyholder or their heirs own the property.
What Title Insurance in Florida Covers
Title insurance protects real estate owners and lenders against possible “defects” in a property, including encumbrances and liens. In essence, the lender wants assurance its security interest in the property you’re buying is in a “superior position” to other lienholders.
Common defects include:
- Another person claiming an ownership interest in the property.
- Improperly executed or recorded documents from a previous sale.
- Fraud or forgery, including false impersonation of the true property owner.
- Liens, encroachments, and easements.
- Errors in tax records.
Each title insurance policy is subject to specific terms, conditions, and exclusions. It’s not unusual for a real estate transaction to have a problem somewhere in the chain of title, so it’s important to identify any issues and take corrective action before final closing, so you have peace of mind about your new home purchase.
If your real estate transaction is a cash deal, you’re not required to get a title insurance policy, but we do recommend our clients still get one.
Title Searches and What They Reveal
When you buy a home in Florida, it’s with the assumption the seller has the legal right to sell it to you. A “free and clear” title means the property can legally be transferred to you. It’s often the case that there are no problems with a home’s title, but a title search ensures no issues arise that might cause you to lose the right to your property, even after closing on it.
Title searches are detailed examinations of a property’s historical records like deeds, court records, property and name indexes, and other documents. These searches discover any claims, defects, and other rights or burdens on the property and verify a seller’s right to transfer ownership to you.
Title searches frequently show defects like unpaid taxes, judgments against the seller, unsatisfied mortgages, or restrictions limiting the use of the land. While it’s true there can be what’s called “hidden hazards” like defective deeds or clerical errors in even the most diligent title search, title insurance protects you against harm from them.
There are some “hidden hazards” even the most diligent title search may never reveal. For instance, a previous owner could have misstated their marital status, resulting in a possible claim by a legal spouse.
Why Use an Attorney For Title Services
Correcting title issues prevents your home buying experience from coming to a screeching halt. Some title problems are simple fixes, but others can be complicated and labor-intensive and require the assistance of a qualified real estate attorney.
Working with a real estate lawyer when buying a home ensures you meet Florida’s requirements for “curing” title issues so your deal can close. Under a standard residential contract, buyers have five days to review their title commitment before being locked into the purchase. The seller then has 30 days (the cure period) to fix or resolve any issues a buyer finds. If the seller’s unable to cure a problem within 30 days, a buyer is entitled to extend the cure period by up to 120 days.
A real estate attorney who handles title issues can advise home buyers of the possible title hazards that can arise before, during, and after a real estate transaction. By using an attorney who also provides title services, you get the added benefit of working with someone who has the legal knowledge and expertise to deal with homeownership issues.
Home buyers should feel reassured that the title company they’re working with is knowledgeable in the handling of residential title services. Munizzi Law Firm knows the steps to identify title defects early in the process, giving you enough time to address them before moving forward with the purchase. If you have questions or concerns about title issues when buying a home in Florida, contact us today.