Prior to the closing on the purchase of a piece of property in Georgia, an attorney performs a title examination of the property. This examination includes researching all of the title documents that are recorded in the Superior Court Clerk’s office for the county in which the property is located. The attorney uses this examination to identify any mortgages, liens, judgments or other encumbrances which need to be satisfied or corrected at the closing.
However, this title search will not identify over 100 possible defects in the title that could arise at any time in the future. For example, this title search will not identify: 1) any prior documents in the chain of title that have been forged, lost or misfiled, 2) any documents that have been recently recorded and not yet indexed by the county, 3) any recent unpaid bills for services or labor to the property that might create a lien, or 4) any and all possible persons who might have a legitimate ownership interest in the property through a will or other legal instrument.
Luckily, a new owner can purchase an owner’s title insurance policy (OTP) from the closing attorney that will ensure the new owner against the above-listed defects and against a laundry list of other possible defects or unknown challenges to the title of the property. Unlike most other insurance policies, the OTP is a one-time only premium (based on the purchase price of the property) that will protect the new owner for as long as they own the property.
If someone ever challenges the owner’s interest in the property, the OTP will defend the owner’s interest in the property and will pay for the attorney’s fees necessary to defend any such claim. If the claim is deemed to be valid, the OTP will pay the amounts necessary to satisfy or correct such claim or else pay the owner for their equity in the property if the claim proves to be catastrophic and cannot be financially satisfied.
In my practice, I routinely see title defects on property searches. When discovered, I immediately call the seller to see if they have an OTP. If so, the defect, in almost every situation, can be corrected so that the closing occurs on time and with little or no headache. Without an OTP, the defect can cause a delay in the closing or, in some instances, can prevent the closing from ever occurring.
For most people, a personal home is their biggest investment that should be protected. Because of this investment and because of the numerous title defects that I see on a weekly basis, I strongly recommend that new owners ALWAYS purchase an OTP to protect their investment from possible title claims and defects that can arise at any time during their ownership of the property.
Van Purser and his wife Jeanne are a licensed Real Estate Brokers in Georgia. Since1984 they successfully purchased and renovated over 400 homes. Their expertise is in representing Buyers or Sellers as an advocate; which means always ensuring their best interest. Additionally, they represented hundreds of clients over the years as an Associate Broker with Metro Brokers, RE/Max and now with his own firm. He and his wife, Jeanne, have been married since 1977. Van or Jeanne can be reached at 770-623-3313, or by email at email@example.com or firstname.lastname@example.org.
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