I’m surprised to hear that a member of the public knows what title insurance IS, so imagine my reaction when I heard someone “got in a fight about title insurance.” A friend is on the Board of Directors of her condominium association and apparently got in quite the dustup with others on the board over whether or not they needed to buy title insurance on parking spaces the association was buying downtown Minneapolis. Luckily, she was in the majority and the association purchased policies for all of the spaces, but some common perceptions and misperceptions about title insurance came up in the “argument.” Dissenting board members argued the following things:
- Title insurance is expensive.
Well, it does cost money – but the price is nothing compared to the expense of defending yourself against a lawsuit, mechanic’s lien or another hostile claim to the ownership of and equity in your property.
- We’re buying five parking spaces, but we only need title insurance on one.
Wrong! These parking spaces are newly-constructed and the chance of mechanic’s liens popping up is higher than on a piece of property that has been built for many years. Also, every owner of each piece of property generally gets named in the types of suits that these new spaces are vulnerable to. If something went wrong, the only space protected would be the one with a policy.
- Title companies only insure things when there is no risk.
Wrong again. I could tell you so many stories….
There’s a reason lenders require title insurance policies – they need to make sure their interests are protected. Home buyers should do the same. Title insurance protects you against things you never imagined would come up. The lady that went to the mat to convince her condo board to buy title insurance was pushing to spend some of the association’s money – but the amount they paid is well worth what they’ll save if there’s a problem. Got questions? The GCS Title team and I are here – call anytime! ~Charlie