What Is Title Insurance?
Real estate law is complex but getting it right can play an important role in your ability to protect your assets. If you are buying a home or a commercial property in Colorado, you’ll very likely need to purchase title insurance. Title insurance is a contract between the person purchasing the property and the title insurer, and if you have any related questions or concerns, it’s time to consult with an experienced Colorado real estate attorney.
The Title Insurance
The title insurance that you purchase is a contract between you as the purchaser and the insurer in which the insurer covers you for specific issues – just like other insurance policies do. These specific concerns include:
- Fixing title-related issues
- Compensating you for any related losses
- Paying for defense of any title problems that may arise in relation to your ownership of the property
Your policy as a purchaser is called an owner’s policy, but there are also lender’s policies that protect lenders who provide real estate loans.
The Protections Afforded by Title Insurance
While most insurance policies look forward, title insurance looks backward and helps to protect purchasers from potential problems that stem from past issues and events. When you purchase a property, it’s a significant investment, and protecting yourself from concerns related to all the following is paramount:
- Current or past ownership of the property
- Any outstanding liens, mortgages, taxes, or other encumbrances against the property
- Any matters that could affect your future ownership of the property, such as any HOA issues, any rights-of-way, any mineral and water rights, and any easements – as well as any covenants, conditions, and restrictions
- Any additional rights, restrictions, and obligations that come with owning the property
The Process
When you purchase title insurance, the title company engages in a thorough search of the property records in the Colorado county in which the property is located. Their job is to uncover any issues that could affect your interests in the property. The title company then creates a title commitment to issue a title policy on the property. The title commitment includes a detailed report of the findings from the title search, specifying any defects, liens, encumbrances, restrictions, and other conditions that could affect the ownership and use of the property. It outlines the steps required to address any title issues before the title insurance policy can be issued, ensuring that the buyer will receive a clear and marketable title to the property upon closing.
The policy is paid for by way of a one-time payment made at the property’s closing, and at that point, your protections – as described and defined by the policy – and any exceptions to the policy are locked in as long as you own the property. Taking the time to carefully assess this document is paramount, and having skilled legal guidance in your corner is always well advised.
Turn to an Experienced Colorado Real Estate Attorney for the Help You Need
The seasoned Colorado real estate attorneys at Brown Dunning Walker Fein Drusch PC appreciate how challenging legal issues related to property titles tend to be, and we are committed to fiercely advocating for your case’s best possible resolution – in defense of your legal rights. We’re also there for you during the purchasing process and will help to ensure that your rights are well protected by the title insurance policy. Learn more by contacting us online or calling 303-329-3363 and scheduling your appointment today.