Title Insurance: Protection for Property Purchasers & Owners
When purchasing a property it is important to understand that you may unknowingly inherit ‘latent’ or hidden defects in the title which may cause you loss or affect your ownership.
Title Insurance is a specialised type of insurance which provides cover in relation to certain unknown and hidden risks that may exist at the time of purchase. These risks may only present themselves after you take ownership of the property, such as:
- Enforcement action by a Local Authority in relation to structures illegally built or altered on the property by a previous owner or structures which do not comply with existing approvals for which you become liable as the new owner (maximum of $160,000 to be provided for a claimable event);
- Any adverse matters that would have been revealed in an up to date survey report, such as boundary defects or encroachments (for properties with a land area of 50 acres or less);
- Forced removal of a structure illegally built by a previous owner over an adjoining boundary;
- Non-compliance with zoning and planning laws and conditions;
- Non-compliance with easements and covenants which burden your land;
- Non-compliance with By-Laws or other obligations which are registered on your title; and
- Complete loss of legal ownership due to a fraudulent sale or mortgage of your property.
Title Insurance is a different kind of insurance:
- One-time premium provides protection forever
- No excess payable on claims
- No-fault claims process means you don’t have to prove fault or negligence – you need only prove that you have suffered actual loss based on cover that the policy provides
- 200% ‘inflation’ allowance for increase in the value of the property over time
Your practitioner’s advice combined with Title Insurance
Title Insurance does not replace the role of your practitioner. The combination of Title Insurance with your practitioner’s professional advice will provide the most comprehensive protection against risks which may affect your legal ownership of your home.
If you already own your home, you can obtain the protection that Title Insurance provides by applying for an Existing Owner policy.
Please note that this information is provided solely for general information purposes only. It is not intended to be a complete description of all the terms, conditions, exclusions applicable to the title insurance product and does not constitute legal advice. You should contact the title insurer directly for specific advice in relation to the title insurance product and for a copy of a sample policy.
If you are interested in finding out more about Title Insurance and whether it is appropriate for your circumstances please contact Sarah Lindsey - Principal Lawyer, Property and Conveyancing on 9550 4600.