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Lecture Notes: Title Insurance

 

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Title Insurance, Owners Policy Exclusions:

 

Exclusions from coverage: (These are non-negotiable)

 

- Zoning and other government regulations

 

- Eminent domain and police power

 

- Title problems created, assumed, agreed to by the insured.

 

- Title defects not known to the company: The secret defect problem, where the owner/insured actually knows of a defect that wasn't recorded, but didn't tell the title company about it. (Not constructive knowledge, but actuall knowledge.)

 

- Title defects that do not result in loss to theowner/insured.

 

- Title defects that are first attached after the effective date of the policy.

 

- Loss or damage based on title defect tht would not have happened if the owner/insured paid for the property. (Remember, the bona fide purchaser rules applies to buyers. If the owner/insured gets the property as a gift, there is no BFP protection.)

 

The Policy:

 

Schedule A: Consists of identification information, such as the ownrs name, the policy number, the date of the insurance, the amount of insurance, and any mortgage on the property.

 

Schedule B: Contains the exceptions from coverage, which consists of the general exception and special exceptions.

 

General Exceptions:

 

1. rights or claims of parties in possession not shown public records.

2. encroachments, overlaps, boundary line disputes which would be shown by an accurate survey and inspection of land.

3. easements and claims not shown by public records

4. liens for services created by law (mechanics liens) and not shown by public records

5. tases and special assessments not shown as existing liens in the public records.

 

Special Exceptions:

 

Any mortgage mentioned in Schedule A.

Anything else specially written in.