YOU ASK:

I am purchasing a newly built home, what are the things I need property title insurance for?

WE ANSWER:

There still may be title problems with regards to a newly built home. After all, you may think you're the first one who owned the property, since you were the one who had the structure built. But you are actually not. For one, the unimproved land on which the house was built may have had several owners already. With each transfer of ownership, there may be some clouds in the title.

The title insurance will serve, first to do a title check to see if indeed, there are clouds in the title. The title check will also initiate legal proceedings in an effort to clear these clouds.

The title insurance will also pay (within specified limits) for legal fees if you need to defend your ownership against claims from other people who say that they are the rightful owners or that they have some interests in the land.

In addition, there is the possibility of mechanic's liens filed against the newly built house. Yes, you may have fully paid your contractor, trusting that he also has made similar payments to his suppliers and subcontractors.

But what will happen if the contractor did not pay their bills. The subcontractors can turn to the property and try to file a mechanic's lien against it. When the judgment is out, without property title insurance, you will have to be the one to pay these contractors.

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