YOU ASK:

My deed of trust has the wrong property address. Is this covered by the title insurance?

WE ANSWER:

Yes, title insurance will cover for title defects related to errors in documentation, including the recording of the wrong property address.

As a background, there are two types of addresses for a piece of real estate - the physical address and the legal address.

  • The physical address refers to the street and lot number. It can easily be wrong, especially in counties where the address is not that exact. It can also be easily corrected.
  • Meanwhile, the legal address or description of the property is what is recorded in the county's public records. It gives the description of what exactly is included in the deeded property. It also specifies the boundaries of the property. The owner can implement these boundaries by building a fence around the property.

    Errors in the legal property address or legal description will cause more serious problems. If this is incorrect, it means that technically, the contract you had with your seller is not binding, since the seller was not selling the correct property.

    The seller has to correct this problem before the deed is transferred to you. This is one of the main reasons why you need title insurance to cover your real estate purchase. You and your seller may have entered into a sales contract in good faith, but this may later be challenged.

    The title insurance policy will help you correct the incorrect legal definitions so that you can be assured that you have a clean title. It may require a more complicated process and your title insurance will surely be worth the premiums you paid when this happens.

Other errors that are covered under your title insurance policy would be mistakes in establishing the size of the lot, the spelling of the names, as well as delays in updating the title for liens, attachments and other limitations.

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