If you have purchased residential or commercial real estate in the past, you know that about 10% of the costs are closing costs. And, a big part of that percentage is title insurance, but many people do not know how important title insurance can be.
Title insurance explained
If you financed your real estate property purchase, the lender likely requires title insurance, but if not, you may not be required to have title insurance. However, this insurance is designed to protect you if there are title issues, which can be important.
Specifically, if a prior Upper Marlboro, Maryland, owner failed to pay taxes, the county could demand that you pay those taxes or the county will foreclose on it, if you do not pay it. If there was a prior loan taken out with the property as security, you may be asked to pay that debt or risk foreclosure. Your entire deal could even be undone if someone else has superior title than the person from whom you purchased the property. This is all covered by title insurance.
What does the title company do?
Prior to closing, they research the state of title, find all liens attached to it and look at the survey for potential encroachments. This allows you to determine whether you are buying what you think you are buying and whether someone else may have a claim to your land. Then, if something pops up later, the title company negotiates with those parties to resolve the issue, whether that means litigation or payment.
What do I do if I get a letter from someone claiming title?
After closing, if you get a letter from a Bel Air, Maryland, entity (governmental or otherwise) claiming some title or lien on your property, do not ignore it. You should contact your attorney and the title company. The title company’s phone number is on the title policy. However, some may require that you inquire in writing. If that is the case, send them a letter through certified mail to ensure that they receive it and you have proof of receipt.
Title insurance claims
Now that your title insurance company knows about the claim, they will handle it. After all, this is exactly what you paid for when you purchased the title policy. Remember, your title policy is active and valid until you sell the property.
For Maryland businesses, check with them on how it transfers if you restructure your entity or pass the property to an entity from your name. If, for some reason, your title insurance ignores the issue or you, you may need to contact a lawyer to fight your case.