The Importance of Title Insurance

What you need to know about the importance of title insurance.

Title insurance is a policy that safeguards you and your lender from financial losses or damages
resulting from a defective chain of title. It looks back at past events that have occurred up to the
present day. Establishing clear ownership and ensuring a clean title is essential, especially for
properties with multiple past owners. Before selecting a title company, it’s crucial to research and
compare multiple options to find the right fit for your needs. Don’t hesitate to take an active role
in the selection process; you have the right to shop around and aren’t obligated to use a specific
title company.

Title companies play a vital role in verifying the accuracy of real estate records pertaining to
property ownership. They provide confirmation that you are the rightful owner and have full
legal authority to utilize the property. The chosen title insurance company must thoroughly
investigate any past issues that remain unresolved. This includes verifying the accuracy of real
estate records and conducting a detailed examination of deeds, easements, encroachments, liens,
zoning changes, and legal property descriptions.

Maintaining an accurate record of past events associated with a property ensures smooth
transferability when selling or leasing it in the future. While title insurance isn’t legally required
when purchasing a property with cash, opting out leaves you vulnerable to potential title defects
that may arise after the closing. It’s essential to familiarize yourself with your title insurance
policy and carefully review what it covers and what it does not cover.
Your title insurance covers your real estate from past events, but what can protect you from
future incidents? The number one resource would be yourself! Unfortunately, fraud is very
common in today’s modern world, especially deed fraud. No real estate is exempt from this risk,
including commercial properties.

In 2019, a Dallas, Texas television station, WFAA, conducted an investigation that detailed how
a 23-year-old stole at least 25 homes, retail strips, and a former Sam’s Club using forged deeds.
Even while in prison, the individual continued committing fraudulent crimes. The investigation
revealed that when someone files a deed, there is no routine check to verify its legitimacy. Once
a deed is recorded, the person named on the deed becomes the new owner, requiring legal action
to recover the property. Vacant and neglected properties are often the easiest targets, as it is
assumed that owners are not paying attention.

Although this investigation was conducted in Texas, similar incidents occur nationwide. New
York is not exempt from such frauds, both in commercial and residential properties. So, what
steps can you take to protect yourself?
First, check to ensure that the most recent deed is under your name. Then, sign up for “Deed
Fraud Alerts.” If you are in the Five Boroughs, visit the NYC Department of Finance website. If
you’re in Staten Island, refer to the Richmond County Clerk’s website. For Long Island residents,
visit either the Nassau County website or the Suffolk County website, depending on your

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