What is Title Insurance and Why Do You Need It?

Buying a property is often the result of years of saving, hard work, and dreaming about your perfect home. You want to protect your investment and ensure you are covered for unexpected costs and losses.

This is where title insurance comes in handy.

Crescent Conveyancers are experienced in catching title and zoning issues during settlement; however we recommend looking into title insurance to protect your dream.

What is title insurance?

A clean title is essential in any property transaction.

Title insurance protects homebuyers and owner-builders against certain hidden costs and complications arising from a “dirty” title, including when they threaten your right to occupy and use the land.

You are protected in case of title errors or unresolved issues (outstanding loans, illegal structures, incorrect surveys) that were unknown at the settlement date.

Known risks can be covered too, usually for an additional premium.

What does title insurance cover?

Being hit with unexpected costs after purchasing a property is the last thing any homebuyer wants.

Taking out title insurance will generally provide reimbursement or compensation for:

• Illegal building work

Cover to demolish or repair unapproved or non-compliant structures built by previous owners.

• Unapproved alterations

Strata homebuyers are covered against alterations made by previous owners or occupiers.

• Boundary/survey defects

Fixing incorrect boundaries, including relocating or removing structures or moving fences.

• Registration gap

If another party lodges a dealing during the ‘registration gap’ between transfer and registering the with the Land Registry, and your interest is blocked.

• Title fraud, forgery and identity theft

Protection against title disputes arising from unexpected third-party title claims or title errors including fraud.

• Planning and zoning

Non-compliance with planning and zoning laws for issues that were not identified or disclosed prior to settlement.

• Outstanding rates and taxes

Title insurance covers you for rates and taxes that were not disclosed or included in the settlement.

Policies may not all cover the same things, so it pays to carefully check what is and isn’t covered before taking out title insurance.

What isn't covered?

Title insurance is a great protection against a whole range of unexpected costs and nasty surprises.

However it doesn’t cover every cost, for example:

• Defects created by the buyer or after the policy is taken out
• Violating zoning or Council laws with new unapproved structures
• Defects known before settlement
• Native title claims
• Environmental contamination

Again, it is important to read through your policy carefully to understand the ins and outs. You don’t want to be caught short with a rejected claim.

When would you need title insurance?

Some of the things title insurance protects against will be caught by a good conveyancer. It is our job to guide you through the settlement process and liaise with local authorities.

However, title insurance is an important tool to recover costs and protect against unforeseen problems such as building code violations, boundary movements and unapproved alterations. Just like insurance on your car, the one-off title insurance premium will more than pay for itself in the case of any claims.

Now that you can confidently answer the question “what is title insurance?” the team at Crescent Conveyancers can provide guidance on the best policy to suit your needs and budget. Contact us today for help with title insurance or any other property settlement question.