70+ Ways to Lose Your Property and Why Title Insurance Is Important

You don’t want problems from prior ownership to interfere with your rights to your property. And you don’t want to pay the potentially ruinous cost of defending your property rights in court.

A title insurance policy is your best protection against potential title defects, which can remain hidden despite the most thorough search of public records and the most careful escrow or closing.

For a one-time premium a title insurance underwriter agrees to reimburse you for loss due to defects existing prior to the issue date of your policy, up to the policy amount, and, should it be needed, the policy also provides for the cost of legal defense of your title. The standard coverage policy protects you against such potential defects as:

1. Forged deeds, mortgages, satisfactions, or releases
2. Deed by person who is insane or mentally incompetent
3. Deed by minor (may be disavowed)
4. Deed from corporation, unauthorized under corporate by-laws or given under falsified corporate resolution
5. Deed from partnership unauthorized under partnership agreement
6. Deed from purported trustee, unauthorized under trust agreement
7. Deed to or from a corporation before incorporation, or after loss of corporate charter
8. Deed from a legal nonentity (styled, for example, as a church, charity, or club)
9. Deed by person in a foreign country, vulnerable to challenge as incompetent, unauthorized, or defective under foreign laws
10. Claims resulting from use of “alias” or fictitious name style by a predecessor in title
11. Deed challenged as being given under fraud, undue influence, or duress
12. Deed following nonjudicial foreclosure, where required procedure was not followed
13. Deed affecting land in judicial proceedings (bankruptcy, receivership, probate, conservatorship, dissolution of marriage unauthorized by court)
14. Deed following judicial proceedings subject to appeal or further court order
15. Deed following judicial proceedings where all necessary parties are not joined
16. Lack of jurisdiction proceedings where all necessary parties were not joined
17. Deed signed by mistake (grantor did not know what was signed)
18. Deed executed under falsified power of attorney
19. Deed executed under expired power of attorney (death, disability, or insanity of principal)
20. Deed apparently valid, but actually delivered after death of grantor to grantee, or without consent of grantor
21. Deed affecting property purported to be separate property of grantor, which is in fact community or jointly owned property
22. Undisclosed divorce of one who conveys as sole heir of a deceased former spouse
23. Deed affecting property of deceased person, not joining all heirs
24. Deed following administration of estate of missing person who later appears
25. Conveyance by heir or survivor of a joint estate who murdered the decedent
26. Conveyances and proceedings affecting the rights of service member protected by the Service-Member Civil Relief Act
27. Conveyance void as in violation of public policy (payment of gambling debt, payment for contract to commit crime, or conveyance made in restraint trade)
28. Deed to land including ‘wetlands’ subject to public trust (vesting title in government to protect public interest in navigation, commerce, fishing, and recreation)
29. Deed from government entity, vulnerable to challenge as unauthorized or unlawful
30. Ineffective release of prior satisfied mortgage due to bankruptcy of creditor prior to recording of release (avoiding powers in bankruptcy)
31. Ineffective release of prior satisfied mortgage due to bankruptcy of creditor prior to recording of release (avoiding powers in bankruptcy)
32. Ineffective release of prior mortgage or lien, as fraudulently obtained by predecessor in title
33. Disputed release of prior mortgage or lien, as given under mistake of misunderstanding
34. Ineffective subordination agreement causing junior interest to be reinstated to priority
35. Deed recorded but not properly indexed so as to be locatable in the land records
36. Undisclosed but recorded federal or state tax lien
37. Undisclosed but recorded judgment of spousal/child support lien
38. Undisclosed but recorded prior mortgage
39. Undisclosed but recorded notice of pending lawsuit affecting land
40. Undisclosed but recorded environmental lien
41. Undisclosed but recorded option, or right of first refusal, to purchase property
42. Undisclosed but recorded covenants or restrictions, with (or without) rights of reverter
43. Undisclosed but recorded easements (for access, utilities, drainage, airspace, views) benefiting neighboring land
44. Undisclosed but recorded boundary, party wall, or setback agreements
45. Errors in tax record (mailing tax bill to wrong party resulting in tax sale, or crediting payment to wrong property)
46. Erroneous release of tax or assessment liens, which are later reinstated to the tax roll
47. Erroneous reports furnished by tax officials (not binding local government)
48. Special assessments which become liens upon passage of a law or ordinance, but before recorded notice or commencement of improvements of which assessment is made
49. Adverse claim of vendor’s lien
50. Adverse claim of equitable lien
51. Ambiguous covenants or restrictions in ancient documents
52. Misinterpretation of wills, deeds and other instruments
53. Discovery of will of supposed interstate individual, after probate
54. Discovery of later will and probate of first will
55. Erroneous or inadequate legal description
56. Deed to land without a right of access to a public street or road
57. Deed to land with legal access subject to undisclosed but recorded conditions or restrictions
58. Right of access wiped out by foreclosure on neighboring land
59. Patent defects in recorded instrument (for example, failure to attach notarial acknowledgment or a legal description
60. Defective acknowledgment due to lack of authority of notary (acknowledgment taken before commission or after expiration of commission)
61. Forged notarization or witness acknowledgment
62. Deed not properly recorded (wrong county, missing pages or other content, or without required payment)
63. Deed from grantor who is claimed to have acquired title through fraud upon creditors of a prior owner. And extended coverage may be requested to protect against such additional defects as:
64. Deed to purchaser from one who has previously sold or leased the same land to a third party under an unrecorded contract, where the third party is in possession of the premises
65. Claimed prescriptive rights, not of record and not disclosed by survey
66. Physical location of easement (underground pipe or sewer line) which does not conform with easement of record
67. Deed to land with improvements encroaching upon land of another
68. Incorrect survey (misstating location, dimensions, area easements, or improvements upon land)
69. “Mechanics’ lien” claims (securing payment of contractors and material suppliers for improvements) which may attach without recorded notice
70. Federal estate or state inheritance tax liens (may attach without recorded notice)
71. Preexisting violation of subdivision mapping laws
72. Preexisting violation of zoning ordinances
73. Preexisting violation of conditions, covenants and restrictions affecting the land

 

 

Let The BIGW Law Firm help you avoid title problems.