SCHUTT LAW FIRM, P.A.
Phone: 239.540.7007
Title Insurance
02/09/2016

Learn More Liens and Hot Title Insurance in Fort Myers Can Protect You

Throughout all of your research and probing of people who have been through the process before we are sure that none of them ever told you that the process would be short and easy. With the multitude of forms, processes, restrictions and buzzwords to keep your eye out for it can be plain hard to know what you’re doing and when. One of the less popular words you may have heard through your information gathering is ‘lien’. Whilst it can be considered one of the most important words when it comes to securing a home or property, many people aren’t provided with much information about what a lien is, let alone the importance of it and the power it can have over your soon to be dream property. If you’re a savvy homebuyer looking to get more detailed information about the home buying process and how you can protect your future ownership of any property you are considering buying, Schutt Law - Title Insurance Agency has prepared some information on liens, the power they have over your ownership and how to protect yourself against them.

Tax Lien

For this article, we are going to start with the one that has the potential for the most impact in your home ownership. That impact being immediate and indisputable foreclosure. If you’re lucky enough to never have received a tax bill then we will start with how it works, in a very general sense. When a tax debt is raised with the IRS, if the amount is greater than the person is able to pay they may enter into a payment arrangement with the IRS directly. Should the amount be considered large, or the IRS do not feel secure that payments will be made, they can request a form of security to be placed against the debt owed. In the case of a lien, that security is the title to the debtor's home or property. When this occurs, an official record is listed against the title. Should the payments stop and the IRS remain dissatisfied that they will receive their owned funds, they can and will move for immediate recovery of the debt. The recovery comes in the form of a foreclosure, whereas despite you transferring the title to yourself including full payment of the property, the IRS are able to foreclose and sell the property with minimal notice for the purpose of debt recovery. Liens are at the top of the list for items that are protected under a comprehensive level of title insurance in Fort Myers. With a reliable title search performed by a reputable agent like Schutt Law - Title Insurance Agency, these liens are discovered prior to any settlement, giving you the opportunity to address this with the current owner before you hand over your cheque. Should a lien not be disclosed and is later raised against you, financial protection and reimbursement are provided to you under the coverage of title insurance in Fort Myers. If either a thorough search or title insurance in Fort Myers sounds like something you are interested in, speak with Schutt Law - Title Insurance Agency at 239.540.7007 and inquire about how a simple upfront payment can protect you from liens on your future property.

Mechanics Lien

One of the lesser known types of liens, however, one that Schutt Law - Title Insurance Agency are well versed in discovering are mechanic's liens. These liens are placed on titles where a builder has completed work on the property, however, has not received full payment. This is often the case where a property has been renovated prior to sale for the purpose of enticing new buyers. Once the sale is complete the previous owner has little interest in the property of how it looks and can often cease to make any agreed payment towards the builder. The reason this isn’t placed above the IRS lien is because in these instances it’s often more expensive for the builder to raise a claim and arrange the sale. In these instances, the builder, now a creditor, will wait for the next organic transfer of the title by way of sale. This means that your property immediately becomes less appealing to any savvy buyers who are looking to purchase a home. Alongside this, any funds that you receive from the sale are directed towards the owed debt first. Protecting yourself against these types of events isn't’ as difficult as you may think, however, it does require a professional service who knows what they’re doing and where to look. Alongside this, a reputable service such as Schutt Law - Title Insurance Agency available at 239.540.7007 is able to provide competitive title insurance rates in Fort Myers where, for a one time fee, financial protection can be afforded to yourself in the event an undiscovered claim to your new home’s title is raised.
WHY TITLE INSURANCE?
Owning real estate is one of the most precious values of freedom in this country. You want the assurance that the property you are buying will be yours. Other than your mortgage holder, no one else should have any claims or restrictions against your home.

Title insurance is issued after a careful examination of the public records. But even the most thorough search cannot absolutely assure that no title faults are present, despite the knowledge and experience of professional title examiners. In addition to matters shown by public records, other title problems may exist that cannot be disclosed in a search. Title insurance eliminates any risks and losses caused by faults in title from an event that occurred before you owned the property.

Title insurance is different from other types of insurance in that it protects you, the insured, from a loss that may occur from matters or faults from the past. Other types of insurance such as auto, life, or health cover you against losses that may occur in the future. Title insurance does not protect against any future faults, but does protect you from risks or undiscovered interests. Another difference is that you pay a one-time premium for a policy that remains effective until the property is sold to a new owner - even if that doesn't occur for decades.
What is a Lender's Policy?

A lender's policy, also known as a loan policy or a mortgage policy, protects the lender against loss due to unknown title defects. It also protects the lender's interest from certain matters which may exist, but may not be known at the time of the sale.

This policy only protects the lender's interest. It does not protect the purchaser. That is why a real estate purchaser needs an owner's policy.
What is an owner's policy?

An owner's policy protects you, the purchaser, against a loss that may occur from a fault in the ownership or interest you have in the property. You should protect the equity in your new home with a title policy.

What does an owner's policy provide?

- Protection from financial loss due to demands that may be charged against the title to your home, up to the cost of the title policy.
- Payment of legal costs if the title insurer has to defend your title against a covered claim.
- Payment of successful claims against the title to your home covered by the policy, up to the cost of the policy.
Why the seller needs to provide title insurance?

Any purchaser will need evidence that his investment in your property is free of title defects. The title insurance policy that you provide the purchaser is a guarantee that you are selling a clear title to your real estate, unencumbered by any legal attachments that might limit or jeopardize ownership. It will reassure your purchaser that he or she is protected from any risks or losses and could help you close your deal.
Why the buyer needs title insurance?

Without title insurance, you may not be fully protected against errors in public records, hidden defects not disclosed by the public records, or mistakes in examination of the title. As a result, you may be held fully accountable for any prior liens, judgments or claims brought against your new property. If this should occur, your title policy insures that you will be defended at no cost against all covered claims up to the amount of the policy.
How much does title insurance cost?

The insurance commission approves and controls the premiums for title insurance policies. The premiums are paid only once and the cost depends upon the purchase price of the property and the policy amount must be equal to the purchase price.
What does title insurance protect from?
  • Fraud
  • Adverse possession
  • Rights of divorced parties
  • Deeds by minors
  • Undisclosed Heirs
  • Errors in tax records
  • False affidavits of death or heirshipProbate matters
  • Deeds and wills by persons of unsound mind
  • Conveyances by undisclosed divorced spouses
  • Forfeitures of real property due to criminal acts
  • Deeds by persons falsely representing their marital status
  • Documents executed by a revoked or expired Power of Attorney
  • Defective acknowledgements due to improper or expired notarization
  • Mistakes and omissions resulting in improper abstracting
  • Forged deeds, mortgages, wills, releases and other documents
  • False impersonation of the true land owner