Help & FAQ

What risks call for Title Insurance?

Real estate has such great value and is so basic a form of wealth that many special laws have been enacted for its protection. As a result, the owner of land has exceedingly strong rights… and so do the family and heirs of the owner.

However, others may have “rights” in the property as well. There are mortgage and leaseholder rights, liens due to unpaid taxes…lien claims to those whom the owner owes money…mining, oil or air rights…and many others. Anyone who has such a claim is, in a limited way, a part-owner. He or she cannot ordinarily be deprived of their interest except by having the claim settled or released. As a new owner you may know nothing about these risks, but you are still vulnerable to such claims on your property. That’s why you need an insurance policy from Mosley Title.


Doesn’t the seller’s deed take care of giving me clear title?

Not at all. A “deed” is merely an instrument whereby a seller transfers his or her right of ownership, whatever it may be, to you. It is not proof that the person described as the seller is actually the owner. It does not do away with claims or rights others may have in the property. From the deed, you cannot determine what rights, liens or claims may be outstanding against your title.


My lender has a mortgage title policy on my property. Why isn’t that enough?

Any person or financial institution that lends money on real estate wants that investment protected.  Mosley Title provides mortgage title insurance policies to assure the lender that the mortgage is a valid first lien protected against hidden as well as known defects in the title as insured. Such a policy affords the only way a lender can be certain about the title which may be acquired in the event of a foreclosure.


A mortgage title insurance policy protects only the lender’s interest in the property, not the current owner’s. That’s why  Mosley Title provides owner’s title insurance policies: to protect the owner’s interest in a piece of property should a claim arise. Purchasing your owner’s title insurance policy at the same time that the lender orders the mortgage title insurance policy can result in savings to you.


Is Title Insurance expensive?

The cost of title insurance on any piece of property is very small when compared with the benefit and security it gives. And, there are no annual payments to keep the policy in force. The original premium is your only cost as long as you or your heirs own the property!


Is the record of ownership complete from the first owner to the present?

Most properties purchased have had a number of different owners over the years. The continuous record of all those transactions is called the “Chain of Title,” and like any other chain, it is no stronger than its weakest link. Anything wrong with the title of the previous owner may very well affect your title, too.


Are there any lawsuits or claims recorded against the property itself?

If the former owner had a new sink installed and failed to pay the bill, the plumber may file a Mechanic’s Lien claim. This stands as a claim on the property which you are, as the new owner, may have to pay in order to clear your title. Similarly, there may be suits pending affecting the property, foreclosures or bankruptcy actions, or any number of claims or legal involvements which may cloud the title until they are properly settled or removed.


Are there suits or judgments filed against the owner of the property?

If a person is sued and a judgment is rendered against that person, any real estate he or she owns may become security for the debt. This means that he or she cannot sell that real estate and deliver a clear title until the judgment is paid, released or otherwise satisfactorily disposed of. Further, other suits filed against the owner or real estate, even though not yet decided, may prevent the sale of the property.


Are all taxes and special assessments paid?

Unpaid real estate taxes are a first lien on any real property. If there has been a tax sale or forfeiture or any other objection or protest, it means that there are complications standing in the way of a clear title.


Does anyone have special rights to the property that would limit ownership?

Many such things are possible. The right-of-way for a road or power line, an easement for a driveway, air rights, sub-surface rights, are examples of rights which may have been sold or granted to someone else by a former owner. If so, there may be restrictions on your use of the land.


If the seller is a corporation, is it in a position to sell the property?

You may buy a piece of property in good faith from a corporation, only to have the validity of the sale challenged by a stockholder who claims it was not properly authorized by the Board of Directors, or that the company was not empowered under its charter or bylaws to sell the land at all. There are further complications possible if the company is in receivership, or if the firm is being dissolved.


What is an abstract? Doesn’t it tell about the property?

An abstract, which is used in some parts of the country, is a history of the title to property as revealed by the public records. Deeds, mortgages, other instruments and legal proceedings which have affected property through the years are all included in the abstract.

If something is revealed in the abstract which might stand in the way of a clear title, it is up to the owner and the owner’s attorney to clear it. If they cannot do this, it must be accepted as a limitation on your right of ownership. Also, it is frequent for matters which seriously affect the title to be omitted in an abstract, because they are not shown in the public records.


Can an examination of the abstract reveal all the defects in the title?

It may not … simply because the public records, from which an abstract is made, may not show everything which affects the title. For example: statements in the record may be incorrect or may fail to show important facts. There may be fraudulent or improperly executed documents on the record. Facts revealed in the abstract may be interpreted incorrectly. There may even be ordinary clerical mistakes which could seriously endanger the title.

Even after all these possible hazards are eliminated, there still remain some of the most serious sources of risk … hazards which by their very nature simply cannot be uncovered.


What are some of the hidden risks?

Some of the most serious risks which are not revealed by the records or by an examination of the abstract but are covered by a Title policy are:

Marital status of owner incorrectly given
Undisclosed heirs
Mentally incompetent or minor grantors
Fraud and forgery
Defective deeds
Confusion due to similar or identical names
Errors in records or clerical work


Is there any way to protect against hidden risks?

Yes, with a Title insurance policy. Under the terms of a Title policy, you are protected against risks and insured against loss. If your title as insured is ever attacked, Mosley Title stands ready to defend it in two ways:

  1. If it is necessary to enter a legal defense of your rights under the policy in any suit or proceeding adversely affecting the title as insured, your Title policy will ensure that your title is defended at no cost to you.
  2. If a loss is sustained, you are protected up to the full amount of your policy, which usually is equal to the full purchase price you paid for the property.