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Title Insurance
Purchasing a property is one of the most significant investments that an individual or organization can make. It's a process that requires a lot of due diligence and attention to detail to ensure that the purchase is legitimate, and there are no surprises down the road. One essential aspect of this process is purchasing title insurance. In New York, title insurance is mandatory for property transactions, and it's crucial to understand why.
What is Title Insurance?
Title insurance is a type of insurance that protects buyers and lenders from financial loss due to defects in a property's title. When a property is sold, the seller transfers ownership to the buyer. Title insurance is an assurance that the title is free from any liens, encumbrances, or legal disputes that could affect the buyer's ability to enjoy and sell the property in the future.
Why is Title Insurance Necessary in New York?
In New York, mortgage lenders will require title insurance for all real estate transactions. This requirement is in place because of the unique history of land ownership in New York. This means that without title insurance, a buyer risks buying a property that may have legal claims against it, such as unpaid taxes, liens, or unresolved legal disputes.
What Does Title Insurance Cover?
Title insurance covers a range of issues that can arise with a property's title. These issues can include:
Errors or omissions in public records
Forgeries or fraud in the chain of title
Undisclosed or unknown heirs
Invalid or expired legal documents, such as deeds or mortgages
Liens, judgments, or other claims against the property or the seller
Title insurance also covers any legal fees or expenses incurred in defending the title against a claim. In short, title insurance provides peace of mind and financial protection to buyers and lenders.
How to Purchase Title Insurance in New York?
In New York, title insurance is typically purchased through the buyer’s attorney. The process involves a title search, which is an examination of public records to ensure that the title is free from defects. The title company will then issue a title insurance policy, which guarantees the validity of the title.
The cost of title insurance in New York varies depending on the property's purchase price and the policy's coverage. However, the cost is a one-time expense paid at the closing of the property sale.
Conclusion
Purchasing a property is a significant investment that requires due diligence and attention to detail. Title insurance is an essential aspect of this process, as it provides financial protection and peace of mind to buyers and lenders. By working with a title company and attorney, buyers can ensure that the title is valid and that their investment is protected.
TALK TO OUR LAWYERS
Before making the largest purchase of your life, schedule a consultation with our attorneys at Julian K. White in Manhattan by calling 212-701-4550. We can shed light on a complex process, giving you the information you need to make the right purchase.