A Brief Look At Title Insurance For The Future Property Owner

• 13 July, 2023

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Every country in the world has its own unique set of laws for buying and selling property, and they can sometimes be a bit difficult to sort through. After all, with the exception of perhaps the Low Countries, land is a commodity that no one is producing more of, what we have is what there is, unless the planet somehow has a growth spurt!

Australia is no different, and sometimes it’s hard to understand some of the more Byzantine property laws on its books. One of the terms that gets a lot of attention is the question of title insurance in Australia, and whether it’s something the property purchaser really needs, or not! So, today let’s ask those questions, and try to find the answers!

To put it in very simple terms, title insurance is used to safeguard the property owner against a slough of legal issues that might come up in regard to it. While most other types of property related insurance are meant to cover you in the event of risks in the future, title insurance is there to protect you from events in the property’s past that might have a deleterious effect on your title. Here are some examples of the kind of past baggage your property might be carrying that even a thorough title search might not reveal, and that could come back to haunt you, the new owner, even though you had nothing to do with those events!

• Previous unresolved legal disputes over ownership
• Undisclosed heirs attempting to lay claim to your property
• Unpaid debts accrued by the previous owners
• Errors in public records that might jeopardise your ownership
• Forged, or improperly worded documents
• Unreported transgressions against zoning laws
• Property line disputes with neighbouring property owners
• Illegally constructed existing outbuildings on your property

Any of these unfortunate and unexpected scenarios could lead to stressful and costly legal battles that are in no way the fault of the unwitting new property owner! It’s in cases like these that holding title insurance can really be a lifesaver, and at very least it gives you some peace of mind when you are making the purchase.

The two main types of title insurance are as follows:

Lender’s Title Insurance – This is meant to protect the mortgage provider from title-related issues.

Owner’s Title Insurance – This is designed to protect you, the new property owner, from any potential legal issues.

One should note that very often it is mandatory that lender’s insurance be purchased when taking out a home loan, while owner’s insurance, even though it is strongly recommended, isn’t actually legally required.

We hope this gives you a better understanding of what title insurance is and what it does to protect you. The final question for you, the future property owner, is whether or not purchasing it is worth it to you? Title insurance does seem like it is just another additional expense in the already costly property buying process, but considering how often those undiscovered negative issues do come up, it could be a very good investment in your peace of mind, as you know you will be protected if they happen.