Q: What Is Title Insurance?

Title insurance is protection against a claim to the title of your property.

Q: What Does Title Insurance Protect Against?

Title insurance will protect the policyholder against the following:

• Mistakes in recording of legal documents
• Forged deeds, releases or wills
• Undisclosed or missing heirs, including spouses
• Deeds by persons of unsound mind
• Deeds by minors
• Deeds executed under invalid or expired power of attorney
• Liens for unpaid taxes
• Fraud
  

Read more in: Why Buy Title Insurance.

Q: What Is The Difference Between Homeowners And Title Insurance?

While homeowners protects the insured against future events, such as flood damage or a break-in, title insurance protects the insured against events that may have occurred in the past, prior to the purchase of the property.

Q: Must I Pay A Monthly Premium For Title Insurance?

Unlike most other types of insurance, the policyholder will only pay the premium once, upon purchase of the title insurance policy.

Q: Why Should I Purchase Title Insurance If I Am Refinancing?

When obtaining a refinance, even from the same source as the original loan, your lender will require title insurance to protect the lender's investment. Various judgments may have been charged against you, such as a mechanics' lien for failure to pay a contractor for work done, or a judgment for failure to pay taxes. The lender wants assurance that the title being financed is clear of any such matters.

Q: Why Should I Purchase Title Insurance If I Am Buying A Newly Built House?

Although you may be the original owner of the house, you certainly are not the original owner of the land on which the house was built. You want to have peace of mind, and your lender wants to know that the property has clear title and that the lender's deed of trust has priority over other liens. Maybe a mechanics' lien has been placed against the building company for failure to pay a subcontractor, or the previous owner is delinquent in paying taxes.

Q: What Additional Benefits Does A Title Insurance Policy Do For Me?

In addition to all of the other benefits, the title insurance policy issued to you at the conclusion of a real estate transaction provides an effective permanent record of all your due diligence, showing your ownership with reference to the official records, showing all recorded deeds of trust (loans) on the property, and showing all easements, protective covenants and the like that affect your property. The policy provides a quick and efficient reference for you, your prospective investors, lenders and purchasers, and in addition qualifies you or a proposed purchaser with a reissue rate discount for future sale or refinance transactions.

Q: Why Should I Get An Owner’s Title Policy If My Lender Has Required A Title Policy?

The lender’s title insurance policy protects only the lender's interest in the property and only for the life of the loan. Owner’s title insurance offers protection against claims even if a claim against the insured property is not valid. The owner’s title policy provides for defense of such claim and when a title underwriter provides a legal defense against a claim covered by the policy, the savings to the insured for that legal defense greatly exceed the one time premium.
Title insurance claims are not an everyday occurrence, but they do occur. A number of cases decided by the Virginia Supreme Court in recent years involve disputes regarding easements, lien priorities, or access in which title insurance claims may have been present.* This does not include the many cases decided each year involving real property in the local Virginia Circuit Courts.

* These cases are

(1) Cherrystone Inlet v. Board of Zoning Appeals Northhampton County, Record No. 051699 (decided April 21, 2006) (variance case involving overlapping setback lines resulting from combination of zoning ordinance and Chesapeake Bay Preservation Act);

(2) Board of Supervisors of Fairfax County v. Board of Zoning Appeals of Fairfax County, Record No. 051269 (decided March 3, 2006) (Supreme Court upholds BZA order requiring demolition of two story garage and apartment that had been constructed 50 years ago in apparent violation of zoning ordinance—NOTE-this precise problem, involving a residential property, would have been covered by an Enhance Residential Owners Policy of Title Insurance).

(3) Ellis v. Simmons, Record No. 042842, (decided September 16, 2005) (Easements of access to large, recently subdivided property, denied because the proscriptive easement relied upon was not proven to have served the entire property included in the new subdivision; dominant estate benefited by proscriptive easement must be established clearly of record)

(4) Britt Construction v. Magazine Clean LLC, Record No. 051004 (decided January 13, 2006) (Mechanics' liens filed against commercial property during course of construction could not be enforced because notice of filing not sent to landowner);

(5) Virginia Electric and Power Company v. Northern Virginia Regional Park Authority, Record No. 042426 (decided September 16, 2005) (right and ability VEPCO as owner of retained easement rights to apportion those easements and grant them to others);

(6) United States of America v. Blackman, Record No. 042404 (decided June 9, 2005) (Enforceability of historic/open space easement in gross, private negative easement in gross could be enforced by United States as successor beneficiary);

(7) WBM, LLC v. Wildwoods Holding Corporation, Record No. 041990 (decided June 9, 2005) (An astonishing case holding that signature by the president of a company for the sale of all lots owned by the Company could not be considered valid corporate authority because sale of substantially all assets of the company outside the ordinary course of business must be approved by the shareholders);

(8) Xpedious Management Co. of Virginia v. Stephan, Record No. 041720 (decided April 22, 2005) (Construing remedies available to landowner upon installation without proper easements of fiber optic cable across landowner’s property frontage);

(9) The Barter Foundation, Inc. v. Widener, Record No. 022409 (decided January 16, 2004) (rights of owners of land with respect to adjoining undeveloped parcel that was dedicated for use as a public street in 1944 but which was never formally accepted by the governing public body);

(10) River Heights Associates Limited Partnership v. Batten, Record No. 030180 (decided January 16, 2004) (enforceability of restrictive covenants prohibiting commercial use of four unimproved lots in residential subdivision);

(11) Richardson, Substitute Guardian v. Amresco Residential Mortgage Corporation (Record No. 030390) (decided January 16, 2004)(lien priority of mortgage secured by real property that a custodian had transferred from a custodial estate to herself by a quitclaim deed);

(12) Dogwood Valley Citizens Association v. Winkelman (Record No. 31053) (January 16, 2004) (dispute over sale by Homeowners Association of two lots in subdivision for nonpayment of road maintenance costs);

(13) Barner v. Chappel, Record No. 022710 (decided September 12, 2003) (whether restrictive covenant prohibiting building of a house, garage, or other structure on a lot in a residential subdivision is enforceable by one or more neighboring landowners);

(14) Board of Directors of Colchester Towne Condominium v. Wachovia Bank (Record No. 021741) (decided June 6, 2003) (relative priority of proceeds from non-judicial sale of condominium unit between unpaid condominium fees and prior first deed of trust);

(15) Utsch v. Utsch (Record No. 021987) (decided June 6, 2003) (dispute in divorce over residence transferred by Deed of Gift from husband to husband and wife as tenants by the entireties);

(16) Jenkins v. Bay House Associates, L.P., (Record No. 021993) (decided June 6, 2003) (dispute between owners of land abutting pond to ownership of pond);

(17) Ainslie v. Inman, Receiver (Record No. 020595)(decided February 28, 2003)(dispute over security interest in partnership property).