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Navigating Title Insurance Defects: A Practical Guide

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Frequent readers of this blog may have noticed that we recommend that buyers of real property always obtain a title insurance policy in conjunction with their purchase. If you missed it, there it is again. We really mean it. The reason that we make that recommendation is that title insurance is the most powerful protection against unknown or unknowable title defects that can have a serious impact on the value of property. When someone (a buyer, seller, title insurance company, or one of their attorneys) discovers a defect, they will need to take proactive steps to remedy the issue and make the title marketable

The Maze of Title Defects: Strategies for Swift Resolution

There are many ways to cure title issues, and here are some of the more common methods:

  • Title Claim.  This is why you purchased title insurance.  Take charge by submitting a claim to your title insurance carrier, entrusting them to address the issue, provided it falls under your policy’s coverage. The title company will then either work to remedy the defect using the methods outlined below or compensate you for any loss in property value caused by the defect.
  • Corrective Instruments.  Frequently, a faulty instrument within the title chain can create a title defect, and resolving this error involves executing and recording a new, correct instrument. However, locating and persuading the individuals responsible for executing these corrective instruments can pose challenges, especially when they are no longer actively involved with the property.
  • Quiet Title Action. This is a lawsuit that seeks to have a court adjudicate parties’ competing claims to the same property.  People frequently utilize it to address claims from heirs or beneficiaries of deceased individuals who emerge within a flawed title chain, to resolve disputes concerning competing surveys, or for any scenario involving multiple individuals asserting ownership of the same property.
  • Declaratory Judgment Action.  This is another type of lawsuit that asks a court to render a decision on a discrete legal issue and define the parties’ rights and obligations relating to that issue. People commonly use them in resolving boundary disputes between neighbors.
  • Breach of Warranty.  When you bought that property, you probably received a “warranty deed,” in which the seller promised (“warranted”) that they had good title to the property.  If they did not, then you have the ability to prosecute a claim against them for any damages that you suffered as a result.  

Secure Your Property’s Future

Curing title defects can be easy or extremely complex, depending on the nature of the defect.  While title insurance companies frequently resolve these issues for parties, that is not always the case.  If you require counsel to assist you in evaluating or curing title issues with your property, contact your trusted local real estate attorney

Dan Guarnieri, Esq.

Dan Guarnieri, Esq.

Dan Guarnieri is a partner at Berlin Patten Ebling. He has a broad range of civil experience, including complex commercial litigation, real property disputes, contract disputes, commercial collections, commercial foreclosures, local government representation, construction litigation, and maritime litigation.

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