We previously blogged on Title Insurance here
2018 saw a dramatic increase in the number of title insurance claims we had to make on behalf of clients. The majority of these were for arrears of taxes and water (from previous owners), although there are several types of protection available to consumers under a Title Insurance policy.
When we help you buy a property, the previous owners certify that they have paid their property taxes up to the date of closing and that they will pay their final water bill. However, often due to the quick turnaround of closings, we don’t have the time needed to order a Tax Certificate from the Municipality to cross-reference this information. In these cases, we rely on “Title Insurance” because your lender (mortgage) is going to require us to order it (and you will have to pay for it anyways). Some clients like us to do both (i.e. pay for a Certificate of taxes from the city AND get a policy of title insurance, but this is only possible where timing allows for it).
In the unlikely event we find out following closing that the taxes or water have not been paid by a previous owner, we will make a title insurance claim on your behalf. Assuming that these are legitimate arrears, and the claim is made within the time period set out by your policy, the arrears are usually paid directly to the Municipal Tax/Water office within a couple of weeks.
We were surprised to have made multiple claims in 2018 as we generally only have a handful per year. What was most surprising to us was that the ‘arrears’ notices were from closings that had happened up to 6 months prior (so there was quite a delay in issuing them from the City Offices). We were happy to report that all of the claims made for these types of arrears were successfully paid out for our clients, at no additional cost to them. Therefore, we think that Title Insurance policies are a good investment and take little time on our part to protect you, the Purchaser.