| In Nevada, most real
estate transactions are closed with the issuance of a title
insurance policy in favor of the owner, lender or both. Many home
buyers erroneously assume that when they purchase a piece of real
property, possession of the deed to the property is all they need to
prove ownership. Not so, because hidden hazards may attach to real
estate. Forgeries, faulty surveys, hidden liens, the false
representation of ownership of a married person as being single are
just a few examples of factors which may cloud the title of real
property ownership. A property owner’s greatest protection is a
policy of title insurance.
What is title insurance?
Title insurance insures property owners that they are acquiring
marketable title. Unlike casualty insurance (policies which insure
against future events), title insurance is designed to eliminate
risk or loss caused by defects in title from past events. Title
insurance provides coverage only for title problems. A title
insurance policy is a contract of indemnity which insures against
loss if the title is not as reported; and if it is not and the owner
is damaged, the title policy covers the insured for his/her loss up
to the face amount of the policy.
The Title Search
Issuing a title policy is an extensive and exacting process. Title
companies work to eliminate risks by performing painstaking search
of the public records or the title company’s own “plant,” where
public records pertaining to the property and the parties to the
escrow are maintained, to determine the current recorded ownership,
any recorded liens, or encumbrances, or other matters of record
which could affect the title to the property. Once a title search is
complete, the title company issues a preliminary report detailing
the current vesting, description, taxes and exclusions from
coverage.
The Preliminary Report
The preliminary report contains vital information which may affect
the willingness and the ability of the parties to close the escrow
such as: ownership of the subject property, the manner in which the
current owners hold title, matters of record which specifically
affect the subject property or the owners of the property, as well
as a legal description of the property and an informational plat
map.
The preliminary report indicates the type of title insurance offered
by the title company and the exclusions exceptions from coverage,
such as recorded deeds of trust, easements, agreements, and
covenants, conditions and restrictions (CC & R’s).
What is Covered
Not all risks can be eliminated by a title search, since certain
“hidden defects” like forgeries, identity of person, incapacity,
incompetence and failure to comply with the law, cannot be disclosed
by an examination of the public records. While the preliminary
report is an offer to insure under certain circumstances, the title
policy is a contract, providing coverage against such “hidden
defects.” Realtors®, buyers and sellers should not assume that all
title policies and title companies are the same. They’re not, and it
is important to ask questions of your title company to determine the
type and cost of coverage available.
Las Vegas Title Insurance Companies |
