Buying a property is an exciting time, but there’s a lot you need to be on top of for a smooth transaction. You want to find the right property at the right price of course, then there’s conveyancing, arranging your finance, and getting building inspections done.
When making such a large financial commitment you want the peace of mind that comes from having the necessary insurance in place. Whether it’s landlord’s insurance for a tenanted investment property, or home and contents insurance for a property you’ll be living in.
But there’s another type of insurance which you might not have heard about called title insurance, and it can protect you against risks both at the time of purchase and later down the line.
What is title insurance?
Title insurance is a one-off premium that you pay to protect against risks that can arise when purchasing a property. A title insurance policy can protect you from potential financial and legal obligation from:
- Illegal building work completed without council permits, and which you were unaware of at the time of purchasing the property.
- Boundary issues arising from survey reports or incorrect surveying.
- Fraud or forgery which results in you being deprived of your ownership of the land or property.
- Outstanding rates and taxes on the property which you inherit as the new owner.
While a good conveyancer will perform the necessary checks, title insurance goes one step further in your cover and provide greater protection if that something goes wrong.
Who should get title insurance?
If you are considering buying a property, or if you already own a home, you should look into whether title insurance is right for you. Property prices are rising, which means that issues with fraud, forgery or illegal building works are likely to have a significant financial impact. With title insurance you have:
- Access to a wider range of options if problems arise in your property transaction.
- Greater protection against disclosed and unknown risks.
- Protection if an illegal building structure is found to be in place on your land.
- Financial insurance support if you ever have to defend your right to your title (plus compensation if your title cannot be defended).
Title insurance will protect you in the event your conveyancer has made a negligent mistake. If you already own a property, title insurance can provide peace of mind.
When is title insurance needed?
While we all hope that we’ll never need to use our insurance cover, the fact remains that the time may come when you will be very glad you have it. Title insurance would be essential in the following situations:
- A third party takes out a mortgage on your property without your knowledge or consent, in which case title insurance would provide the financial support to challenge this claim.
- You want to add an extension on your property, but upon inspection the council finds that an existing extension on your property was done without approval. A costly demolition order is given, but your title insurance offers indemnity against the order and provide support to rebuild in line with the necessary standards.
- You receive notification of outstanding rates from the council after settlement. Your title insurance will protect you against this amount, and any further interest payable.
- A conveyancer has made a mistake during the transfer and the purchaser now wishes to sue you. Your title insurance protects you against this risk.
For a one-off fee you are protected against these risks and others. While it may seem like these sorts of scenarios are unlikely, it is far better to be prepared for any financial risk. A simple chat with one of our team can help you to understand whether title insurance is right for you.
Can you get a title insurance policy retrospectively?
Even if you already own a property you might be a suitable candidate for title insurance. At Rose Law we recommend you to look into title insurance and whether a title insurance policy is right for you. You might want to consider title insurance for your property if you have:
- Any type of residential or commercial property.
- Land or a dwelling with a granny flat or extension on the property.
- Any doubts or concerns arising from the title or transfer of your property.
- A property which you are looking to subdivide.
Risks can arise from all sorts of things, and the single premium you pay protects you for the life of your ownership of the property, even if you have already purchased and may need cover down the line.
Rose Lawyers are here to provide you with comprehensive advice, support and guidance. If you are looking to purchase a property and would like to receive information about whether title insurance is right for you, please call us today on 03 9878 5222 or contact us online.