when puchasing a condo is title insurance really needed. The last owner had a title search done 9 years ago.

Asked by Fred Limback, 21237 Sat Dec 22, 2007

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Don Tepper, Agent, Burke, VA
Sat Dec 22, 2007
Yes, absolutely. Here's why: During the intervening 9 years, something may have happened to cloud the title or otherwise cause a problem. For instance, the owner may have had a lien, suit, or judgment against him. Maybe he didn't pay his federal or state taxes and there's a lien. Maybe he had work done on the condo, and didn't pay the workman. Maybe he was late on a condo fee, and the condo fee filed a lien on the unit for the penalty amount. (Don't laugh. Happened to a friend of mine a few years ago. The whole thing escalated out of control, and he lost his condo.) Maybe the condo didn't pay a water bill. In some jurisdictions, an unpaid water bill can result in a lien. Maybe there's a parking space that goes with the condo, and a few years ago someone slipped on a patch of ice, or a few drops of engine oil, and received a judgment which the owner never paid.

You want me to go on? No. Well, I will, anyway.

Suppose the previous owner attempted to sell the unit with a lease-option. The smart tenant-buyer recorded a "notice of agreement" with the local city or county. That notice will cloud your title. Maybe, if it's a small building condo, the owner had new windows installed a few years back. Whether he paid or not, often, to secure financing, burried in the documentation from the friendly window company is a lien, just like a second mortgage, that's placed on your property. Didn't know that? Lots of people don't, and they don't read the fine print. But unless the lien's been properly removed, it's still there. Suppose at the time the last owner purchased the unit, he purchased a companion parking space. But if the condo was still under development, the parking space may have been in the developer's name. Suppose it was never transferred out of the developer's name, and taxes haven't been paid on it for awhile. You might have a lien against your condo; you might have a lien against the parking space; or the parking space may have been sold for the taxes owed. Don't laugh. That happened to me.

You want me to go on? No? Well, tough. Let's continue. Suppose the last owner was married at the time he purchased the unit, but subsequently got divorced. The divorce decree may have required that he either buy his ex-spouse out or sell the unit. If he didn't, then she may well have filed suit, and possible received a judgment against him for her share of the condo. Suppose the owner had a child who feels unjustly treated over something. There's another suit. Or ex-fiances or ex-partners (personal or business).

These things don't take 9 years to develop. Many don't take 9 months to develop. You definitely need title insurance.

As for the suggestion below to use the same title company, don't bother. You'll sometimes get a break if there's a new title search within a year of the past one. But 9 years? No way.

Hope that helps.
3 votes
Raleigh Homer, Home Buyer, Raleigh, NC
Fri Jun 26, 2015
As others have said, Title Insurance is essential... and it's often paid by the seller not the buyer!!! Your loan officer should have explained that. They have to disclose all closing costs, regardless of who pays for what.

You also have to do title search again since many liens, back taxes, secondary mortgage, debt, additional ownership...might happen in the last 9 years.

If you want to find out yourself, you can get an online title report within few minutes on website such as http://www.nextace.com or http://www.searchq.com then you should exam the title and verify the records on your own.
Web Reference:  http://www.searchq.com
1 vote
Dale Weir, Agent, Chesterfield, MO
Sat Dec 22, 2007
absolutely! The title search protects you. It varies by area whether it's paid by the seller or the buyer, but without it, you are leaving yourself liable to all sorts of "nasties" that could prevent you from receiving a clear title, which could affect your being able to resell the property in the future.
Web Reference:  http://www.yourstlhome.com
1 vote
Darin Provost, Agent, Portland, OR
Sat Dec 22, 2007
Absolutely. In Oregon, it's the duty and expense of the seller.
Web Reference:  http://www.darinprovost.com
1 vote
Steven Berth…, Renter, Palm Harbor, FL
Wed Mar 25, 2015
I am looking a aproperty in Clearwater florida it is priced 30k below market value I feel that ther may be liens on proprety how do I find out
0 votes
Annette Law…, Agent, Palm Harbor, FL
Wed Jul 2, 2014
This question was asked in 2007,....
But Don's response is AWESOME and worthy of a read.

...but I won't go on.
0 votes
Renda Fisher, Agent, Osage Beach, MO
Wed Jul 2, 2014
I would never recommend not getting title insurance! The lender will require you if you are getting a loan. People get divorced, people pass away, people have financial situations. A lot can happen in 30 days not to mention 9 years. All kinds of situations can change the chain of title to a piece of property.
0 votes
Pete Elsner, Agent, Kirkwood, MO
Wed Jun 17, 2009
My Dad was in Real Estate for 53 years, he always said that was the best insurance you will ever buy!
Web Reference:  http://ww.PeteElsner.com
0 votes
Trisha Lee, Agent, Columbia, MO
Thu Dec 27, 2007
Do not EVER buy property without a title search and title insurance. It is the best money you will ever spend. Think what would happen if you didn't have health insurance and contracted cancer. Here's hoping you don't every NEED the title insurance, that all is clear.
Trisha Lee, REMAX Boone Realty, Columbia, MO
Web Reference:  http://www.TalkToTrisha.com
0 votes
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