Buying a property will be the single biggest investment of your life.
Title Insurance is inexpensive. The premium is a one-off low cost payment that protects a purchaser for the life of ownership, against claims for various unknown and known risks that threaten ownership and use (including structures) of the property until its resale.
Read more: Transcript from below video...
‘Known risks’ are any risks disclosed by the vendor or otherwise discovered by the purchaser prior to settlement (e.g. building works completed without council approval, a building encroaching onto or from the land being purchased, or an extension having been built on a utility easement).
If there are no known risks evident a policy will be issued for ‘clean title’.
Under the traditional conveyancing process in South Australia, where a defect in title is discovered, a purchaser has a number of options
- if the contract has not been signed by all parties or the purchaser has not lost the right to cool off, the purchaser may choose not to proceed i.e. cool off or may try to negotiate a reduction in the purchase price
- if the contract has been concluded and any right to cool off has passed, the purchaser may have a right to rescind (in limited circumstances) or to claim compensation
Title Insurance provides another option for the purchaser – who can take out title insurance in respect of a known title defect.
This provides a quick and inexpensive route out of time-consuming legal problems without the need to prove negligence. It will cover the costs of defending the title should problems ever arise and provide compensation if the title cannot be defended.
What does Title Insurance not do?
I already own my home, can I still take out title insurance?
Note, that title insurance does not cover pest and building inspections – it is specifically designed to cover title defects and ownership issues.
AICSA Partner – First Title
A title insurance policy is valid whilst the person owns the insured property.
It is important to read the policy document provided by the insurer to fully understand what your policy cover provides.