IF you have bought a property recently, you might have been asked if you want title insurance.
There is often confusion regarding what this policy covers and West Perth Settlements conveyancing manager Julia Rowe explains its purpose.
THERE are many inherent risks associated with buying a home, and while your conveyancer/|lawyer will work diligently to identify any title defects of the property you intend to purchase, it is not always possible to discover all the potential risks against the title to the property.
Title insurance gives homeowners protection against future claims to these “unknown” title defects.
It does not seek to replace the duties of your conveyancer/lawyer, but together with their advice, it provides you with the most comprehensive cover to help protect the legal ownership of your home.
A title insurance policy typically insures against claims arising from the following risks:
• Illegal building works undisclosed by the seller or council.
• Survey/boundary defects undisclosed due to an out of date survey.
• Forgery, fraud and identity theft.
• Registration gap whereby a third party lodges a dealing against the title preventing the Transfer of Land being registered.
• Unpaid rates and taxes as result of an error by council.
• Planning and title defects including unregistered easements, covenants, encroachments and access rights and non-compliance with planning and zoning legislation.
Title insurance cannot deal with non-title matters such as building and pest inspections, contamination and native title claims.
We strongly advise homebuyers to read the policy wording carefully to understand the terms, conditions and exclusions as these may vary between insurers.
While title insurance is not compulsory, and the risks of unknown title defects are relatively low, we recommend homebuyers as well as existing owners seriously consider taking out a title insurance policy.
It is a one-off reasonably priced premium that offers protection for as long as the homebuyer owns the insured property. n