Understanding Title Guarantee and Title Insurance
Title Guarantee Explained
A Title Guarantee offers a promise that the seller owns the property in question free and clear at the time of sale. It provides assurance to the buyer by ensuring there are no liens, debts, or encumbrances that could affect ownership or the ability to transfer the title.
Why Title Insurance Matters
Title Insurance, on the other hand, serves as a protective measure against any issues related to the title that may arise after the property transaction is finalized. It covers a wide variety of potential risks including:
- Claims due to property fraud
- Errors or omissions in previous deeds
- Forged documents
- Undisclosed liens and other unforeseen defects.
Example Scenario
Imagine John is buying a house from Jane. To safeguard his investment, he obtains a Title Guarantee assuring him that Jane has a valid title. Post-purchase, John discovers an unexpected old lien filed by a contractor who hasn’t been paid. The benefits of the Title Guarantee and Title Insurance come into play, safeguarding John’s interests and resolving the issue without financial loss to him.
