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What Title Insurance Does Not Include: Understanding the Gaps

Posted by Andrew Senerchia | Oct 02, 2023 | 0 Comments

Title insurance is an essential component of any real estate transaction. However, it's equally important to understand what it doesn't cover. In this blog, we'll shed light on what title insurance typically does not include.

1. Property Condition

Title insurance primarily focuses on the title's integrity and ownership history, not the physical condition of the property itself. It won't protect you against issues like structural problems, faulty plumbing, or a leaky roof. That's where a thorough property inspection comes in handy.

Before purchasing a property, consider hiring a qualified inspector to assess its physical condition. This can help you identify potential problems that could be costly to address down the road.

2. Zoning or Land Use Violations

Title insurance doesn't provide coverage for zoning or land use violations. If you later discover that your property isn't zoned for your intended use or there are restrictions on how you can use the land, your title insurance policy won't offer protection.

To avoid zoning issues, it's wise to consult with local zoning authorities and conduct due diligence on the property's zoning and land use regulations before finalizing the purchase.

3. Environmental Contamination

Environmental issues, such as soil contamination or groundwater pollution, are typically not covered by title insurance. If you buy a property and later discover environmental problems, you may be responsible for the cleanup costs, which can be substantial.

To mitigate this risk, you can conduct environmental assessments and Phase I and II environmental site assessments before closing the deal. These assessments can uncover potential contamination issues and help you make an informed decision.

4. Boundary Disputes

Title insurance won't protect you in boundary disputes with neighbors or adverse possession claims. If your property lines become a point of contention, you may need to resolve the issue through legal means, such as boundary surveys or litigation.

To prevent boundary disputes, it's advisable to have a survey conducted before purchasing a property to clearly define its boundaries.

5. Future Changes in Title

Title insurance only covers issues that occurred before the policy's effective date. It doesn't protect against future changes in title, such as liens or encumbrances that arise after the purchase. To safeguard against these risks, you may need to purchase additional title insurance coverage or stay vigilant about monitoring your property's title.

6. Unrecorded or Unknown Title Issues

Title insurance typically doesn't cover unrecorded or unknown title issues. For instance, if someone has a legitimate claim to the property but hasn't recorded it, or if there are hidden heirs or missing wills that surface later, your title insurance policy may not provide protection.

While title insurance aims to uncover such issues during the title search process, some may still go unnoticed.

In conclusion, while title insurance is a vital tool for protecting your property investment, it's essential to recognize its limitations. To ensure comprehensive protection and make informed decisions, it's advisable to conduct thorough due diligence, including property inspections, environmental assessments, and legal consultations. If you have any questions or need assistance with title insurance, don't hesitate to contact Dimension National Title at (401) 825-7102. Our experienced professionals are here to help you navigate the complexities of real estate transactions and title insurance.

About the Author

Andrew Senerchia

Bar Admissions Rhode Island, 2018 Massachusetts, 202 Connecticut, 202 US District Court of Rhode Island, 2022 Education Roger Williams University School of Law - Bristol, Rhode Island  Juris Doctor, 2018 Roger Williams University - Bristol, Rhode Island Bachelor of Science, 2015 Profe...

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