When purchasing a property there is nothing that replaces proper due diligence being undertaken in relation to the property you wish to buy. This could include pest and building inspection reports being conducted, ensuring the improvements have been council approved and all improvements are constructed on the lot you are purchasing (a surveyor’s report will show this).
Sometimes this information may not be available or there is pressure on to exchange Contracts for Sale to secure the property, due to multiple purchasers, and the 5 business day cooling off period has to be waived, or you have purchased at auction, where there is no cooling off period, and you have not had the time to undertake due diligence.
So how can Title Insurance assist you?
First, what is Title Insurance?
Title Insurance is an insurance you take out on the property you are purchasing and is valid during the life of your ownership of that property. It is a one-off premium, depending upon your purchase price, and there is no excess payable on claims.
What does Title Insurance cover?
Title Insurance when you purchase a property can provide protection against certain matters which you were not aware of at the time of your purchase.
What types of matters?
These matters could include illegal structures on the property, which should have been council approved. Title Insurance could cover the cost of removal and replacement of that structure or rectification of that structure to obtain council’s approval. (N.B. there is usually a cap on the amount covered for unapproved building works)
Title Insurance could also cover structures which are found to be encroaching on a neighbouring lot or vice versa. If a structure you thought was wholly on your land was found to be partly on your neighbours land, Title Insurance could cover the cost to rectify that encroachment by, for example, negotiating with the neighbour to create an easement to allow that structure to remain where it is or purchasing from the neighbour that piece of land. The Title Insurance company will work out the best way to rectify the issue.
Providing you are not aware of any of these issues at the time of your purchase, Title Insurance can also cover:
Fraud & Identity theft
Planning and title defects
What is the cost of Title Insurance?
The cost of Title Insurance is a one-off premium and is dependent upon the purchase price of the property. One of the companies on the market quote $834.21 for a purchase price between $750,001 and $1,000,000.
There are currently only a few companies who offer Title Insurance.
Your property purchase is one of the biggest investments you will make during your lifetime. Therefore, it is important to seek professional advice from a property lawyer who can ensure proper due diligence is undertaken, discuss with you whether you should consider Title Insurance on the property you wish to purchase and to guide you through that journey.
If we can assist you with your property purchase or you have any questions in relation to this article, please feel free to contact our office.