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Title Insurance

Discussion in 'General Property Chat' started by Tony, 10th Oct, 2016.

  1. Tony

    Tony Member

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    What are people's views on Title Insurance?

    I have never heard of it previously when I purchased and never bought it but it has come up recently.

    Is it worth it? Are you protected by other, existing means and this is just something extra that you don't really need?

    Thanks in advance
     
  2. Chris White

    Chris White BUYERS AGENTS & PROPERTY MANAGERS Business Member

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    There are a lot of unapproved structures, especially in QLD so title insurance may be of benefit if you suspect this to be the case. Or if you do not want to get a survey done on the property and there are numerous other things that it covers.

    I have taken it out myself and advise many clients to take it out, especially if the above may apply.
     
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  3. hash_investor

    hash_investor Well-Known Member

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    Does the bank insure it if you have a mortgage?
     
  4. Chris White

    Chris White BUYERS AGENTS & PROPERTY MANAGERS Business Member

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    Do you mean mortgage insurance? Which covers the bank in case of default.

    Title insurance covers these things -

    Types of risks covered by title insurance

    Failure to obtain correct priority with mortgage registration
    Invalidity or unenforceability of the mortgage
    Fraud or forgery
    Loss of priority through fraud or other circumstance
    Contravention of zoning laws
    Contravention of easements, rights of way and covenants recorded on the title to the land
    Unauthorised or illegal structures
    Illegal sewerage connections
    Encroachments by or on the land
    Adverse affectations or resumption notifications by any government or statutory authority
     
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  5. Toon

    Toon Well-Known Member

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    I took out title insurance with my last purchase, which was in Qld in Nov. I had never heard of it either until it was mentioned on this forum. My B&P inspection report found a couple of potentially dodgy things, so for a once-off payment of ~$300, I felt it was worth it. I disclosed the potential issues & the insurer agreed to cover them.
     
  6. hash_investor

    hash_investor Well-Known Member

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    What were those dodgy things?
     
  7. Toon

    Toon Well-Known Member

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    Things built possibly without council approval - carport and pergola/bali hut and the garage (which itself would've been there for a very long time) has been extended at some stage to meet the fence-line.
     
  8. hash_investor

    hash_investor Well-Known Member

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    How does that effect the title? Can council react on your title?
     
  9. Toon

    Toon Well-Known Member

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    The title insurance protects you against the event that council orders you to demolish unauthorised building works.

    This is from Stewart Title's Website:


    Cover is provided for a broad range of risks. Purchasers are covered for actual loss caused by risks such as:

    • Illegal Building Work: enforcement action by a Local Authority in relation to non-approved structures which have been built by any previous owner of the property without the required Council permits or which do not comply with those permits (for rural properties this cover is limited to the main residence, including sheds, carports, garages used for residential purposes and any swimming pool). This coverage is capped at $150,000;
    • Registration Gap: someone else lodges a dealing during the registration gap which prevents your interest from being registered or recorded;
    • Fraud, Forgery & Identity Theft: loss due to fraud, forgery or identity theft which results in you being deprived of your ownership of the property; someone else claiming ownership of a part or all of the land by adverse possession;
    • Boundary & Survey: forced removal or relocation of a structure because it encroaches over an easement or on to the neighbour’s property and any adverse matter affecting Title that would have been revealed in an up to date survey report. Please note that boundary and survey coverage will not apply to land where the land area size exceeds 50 acres;
    • Planning & Title Defects: loss due to non-compliance with existing zoning and planning laws, unregistered easements and covenants, access orders, access rights or a right of way, lack of legal access, and defects in title to the land;
    • Outstanding Rates, Taxes and Levies: outstanding rates and taxes on the property which the insured is liable for as the current owner of the property;
    • Unpaid Local Infrastructure or Local Improvement Levies: errors made by the insured’s practitioner or Local Authority in respect of unpaid local infrastructure or local improvement levies or charges due to a Local Authority which may result in an encumbrance, charge or lien or writ on the Title to the land;
    • Unmarketability: loss on resale of the property because of the existence of a covered title risk.
    Stewart Title also provides cover against the following risks where the circumstances creating or giving rise to these risks occur after settlement:

    • fraud, forgery or mistake which lead to someone else claiming an interest in the land;
    • someone else builds a structure, other than boundary walls or fences, which encroaches onto the insured’s land;
    • a Local Authority assesses supplemental rates or taxes not previously assessed against your property for any period prior to the Policy Date.
    Standard cover is also offered for the period between settlement and actual registration of documents to guard against a third party interest registered on title after settlement but before registration of the insured’s interest.

    Stewart Title can also provide cover over known defects discovered in the course of the conveyancing transaction for no additional premium. If a defect is discovered, please contact our Underwriting Department for custom underwriting.

    In addition to covering actual loss suffered by the insured, Stewart Title has a duty to defend the insured’s title. Stewart Title will also cover all of the insured’s costs, legal fees and expenses if we need to defend their ownership.

    Further, Stewart Title will reimburse rental charges for an equivalent property if the insured cannot use the property as their home because of circumstances insured under the policy. The rental charges will continue to be reimbursed until the cause of the claim is resolved or until you are able to resume the use of the property as your principal place of residence (whoever is the earlier).
     
  10. Colin Rice

    Colin Rice Mortgage Broker Australia Wide Business Member

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    I think this must be a new push as with my last purchase my lawyer recommended it. Previous purchases wasnt mentioned.

    I didn't take it but can see how it would come in handy in some situations.
     
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  11. Toon

    Toon Well-Known Member

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    I was just lucky to have read about it on PC just prior to my last purchase, otherwise I would most likely have bailed out of the deal after the B&P. My conveyancer never mentioned it & I had to organise it myself, but I'm glad to have that piece of mind in the highly unlikely event the council ever comes poking about in future.