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Attorney Ben Proto - The Musings of a Mad Lawyer

Wednesday, October 9, 2019

Do I Need to Purchase Title Insurance in Connecticut?

Most home purchases require financing. And when a bank finances a transaction, it requires the purchaser to have title insurance. Banks require title insurance to ensure that loans are repaid even when title defects exist in a property. However, the title insurance required by a bank only covers the lender’s interest in the property through the institution’s mortgage. In other words, this doesn’t protect the owner of the property, which is why most homeowners obtain a separate title insurance policy. Below is some additional information about title insurance in Connecticut. 

What does title insurance do?

Title insurance protects the owner of a piece of property from financial loss caused by title-related issues, such as:

  • Undisclosed heirs
  • Lost or forged deeds
  • Invalid transfers of property
  • Incorrectly indexed deeds 
  • Undiscovered liens 
  • Encroachment issues
  • Zoning issues

In addition, title insurance may provide coverage against loss caused by the forced removal of an existing residence due to building permit defects, the refusal of a buyer to complete a property purchase, or the refusal of a lender to provide financing. The inability to secure a building permit for remodeling due to a violation of subdivision laws may also be covered by title insurance, as well as loss resulting from future encroachments onto the property. In other words, title insurance protects purchasers from a variety of common problems with property, even if they aren’t specifically related to a property’s title.

Why aren’t defects always discovered during the initial title search process?

Even when a full and accurate title search is performed prior to closing, the attorney conducting the title search is generally only able to uncover title defects that are either recorded on the land records or discovered via a municipal search. When evidence of a title defect isn’t recorded in the land records, there is no way that the individual conducting the title search can discover the existence of a title defect. In other words, title insurance is necessary because it accounts for title defects whether they are easily discoverable or not. If you are interested in purchasing a home in Connecticut and have questions about your title insurance obligations, you should contact a real estate attorney for a consultation. 

Contact a Connecticut real estate lawyer 

Real estate transactions in Connecticut, whether residential or commercial, can be complicated, and it’s important to ensure that no important details are overlooked during the process. At the Law Office of Benjamin S. Proto, Jr., our experienced Connecticut real estate professionals keep buyers apprised of their rights and duties as they navigate the residential and commercial real estate transaction processes. Therefore, if you are contemplating a purchase of residential or commercial property in Stratford, Bridgeport, Milford, Trumbull, Shelton, Fairfield, Orange, Derby, New Haven, or anywhere else in Connecticut, please contact us today for a consultation. 

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