What Is Title Insurance?
Title insurance is a form of indemnity insurance that protects property buyers and mortgage lenders against financial loss caused by defects in the title to real property. Unlike other forms of insurance that protect against future events, title insurance protects against claims arising from events that occurred before the policy was issued, such as errors in public records, undisclosed heirs, forged documents, and unrecorded liens.
In Florida, title insurance is a standard part of virtually every real estate transaction. Whether you are purchasing a home in Fort Lauderdale, buying commercial property in Broward County, or acquiring land in Miami-Dade or Palm Beach County, title insurance provides essential protection for your investment.
Types of Title Insurance Policies
There are two primary types of title insurance policies in Florida. An owner's policy protects the buyer's ownership interest in the property for as long as they or their heirs own it. A lender's policy, also called a loan policy, protects the mortgage lender's interest in the property up to the amount of the outstanding loan balance. When financing is involved, the lender will require a lender's policy as a condition of the loan. The owner's policy is optional but strongly recommended.
In Broward County, it is customary for the seller to pay for the owner's title insurance policy, although this can be negotiated between the parties. The buyer typically pays for the lender's policy if a mortgage is involved.
What Does Title Insurance Cover?
A standard Florida title insurance policy covers a range of title defects and claims, including errors or omissions in the public records, forged deeds, mortgages, or other documents in the chain of title, undisclosed or missing heirs who claim ownership, liens from unpaid taxes, assessments, or judgments, unrecorded easements or encumbrances, and mistakes in the legal description of the property.
Enhanced title insurance policies, available for an additional premium, may provide broader coverage including protection against post-policy forgery, encroachment issues, zoning violations, and building permit defects. A Fort Lauderdale title review attorney can advise you on which level of coverage is appropriate for your transaction.
The Title Search Process
Before a title insurance policy is issued, a thorough title search is conducted. In Broward County, this involves examining the public records at the Broward County Records Division to trace the chain of ownership, identify any liens, mortgages, judgments, easements, or other encumbrances, and verify the legal description of the property. The title search results are summarized in a title commitment, which outlines the conditions that must be met before the policy is issued and lists any exceptions to coverage.
An experienced real estate attorney in Fort Lauderdale reviews the title commitment to identify potential problems and works to resolve any issues before closing. Common issues discovered during title searches in South Florida include unreleased mortgages from prior sales, municipal code enforcement liens, outstanding property tax liens, and judgment liens against prior owners.
Title Insurance Costs in Florida
Title insurance premiums in Florida are regulated by the Florida Office of Insurance Regulation and are based on the purchase price or loan amount. The premium is a one-time cost paid at closing and provides coverage for as long as the insured party has an interest in the property. For an owner's policy, the premium on a $400,000 property in Broward County is approximately $2,075. Simultaneous issuance discounts are available when both an owner's and lender's policy are purchased at the same time.
Why You Need an Attorney for Title Review
While a title company can issue a title insurance policy, having a Fort Lauderdale real estate attorney review the title commitment and closing documents provides an additional layer of protection. An attorney can identify issues that a title company might overlook, negotiate the resolution of title defects with the opposing party, and ensure that the policy provides adequate coverage for your specific situation. In complex transactions involving land development, commercial property, or properties with unusual title histories in Broward County, attorney involvement in the title review process is particularly important.
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