Title Insurance For Real Estate Transactions In Emerging Markets


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Title refers to the legal right to a property which is obtained by a requisite registered document. The title of a piece of property changes whenever ownership changes. A certain gap or title defect exists somewhere along the chain of transfers and transmissions of the property.

Typically, title insurance is set up as a single premium policy, requiring an upfront lump sum payment. Although this is not very frequent, certain mortgage lenders may even need title insurance as a condition for mortgage offers. It is typical for the one-time premium to be applied to the loan advance if title insurance is acquired through the mortgage lender. Title insurance aims to safeguard both the lender and the borrower in addition to the former.

A lot of the legal work that a lawyer would typically have to do can be avoided by purchasing insurance. This can significantly speed up the remortgaging process.

In the real estate market, the problem of ownership and title is pervasive. The majority of title disputes are founded on the legal maxim “no one can give better title than what he has” (nemo dat quod non habet). In other words, a holder of a defective title would be unable to transfer a valid title to his purchaser.

In the real estate sector, title insurance is something that is desperately needed and will unquestionably ease the concerns of both buyers and developers, lenders, and institutional investors. It defends the insured against all losses and claims sustained by the insured as a result of a title defect in a property (of which the insured was not aware at the time of the policy’s effective date) even prior to the policy’s effective date. Therefore, title insurance can be defined as an insurance against any loss brought on by a flaw in the property’s title.

Many mortgage brokers will attest that the length of time needed to complete a mortgage or remortgage application can greatly vary from application to application. Nevertheless, it is typical for a remortgage agreement to take about 30 days to complete, even after the offer has been accepted.

Recent research by one of the main lenders revealed that the existence of title insurance might reduce the typical completion time by about 10 days. When there are no problems with a case, an application may be approved three days after the mortgage offer.

A title policy will essentially be set up to safeguard the legitimacy of the title. A flawed title merely indicates that there is an issue with the mortgage deeds; this frequently indicates that the deeds may be lacking, damaged, misplaced, or insufficient in some other way. Title can also be abused by issues like fraud, whether it’s committed by the borrower or even against them.

The policy itself will endure for as long as the mortgage term if appropriate title insurance is in place, and it will ensure that the loan is legitimate, enforceable, and on a marketable title.

The reality is that it is extremely unlikely that there will be any title issues when a borrower remortgages their existing property because all necessary checks would have been made when the property was purchased. However, any mortgage lender will still require a suitable amount of legal work to be done in order to protect themselves in the event of borrower default.

Although it is improbable, title insurance will prevent any parties to the mortgage from suffering financial loss in the event that a problem arises as a result of a title flaw.

Obstacles to title insurance include delayed legal redress of title disputes; substantial costs involved in conducting due diligence of the property before issuing the policy;  lengthy and a time-consuming process of conducting searches at the appropriate land registries, inspection of land records maintained in government offices and making such other enquiries as may be necessary to ascertain if there is any encumbrance on the property; among others.

The main source of anxiety for the majority of developers, private equity investors, institutional investors, and even buyers is the possibility that title to the property will be contested, which would reduce its marketability and, in the case of construction projects, even impede and halt the progress of the project.

The cost of the transaction as a whole rises as a result of title concerns leading to protracted legal battles. 

All project’s developers are prone to numerous legal disputes over the title to the land, which has an adverse effect on the project’s customers. Having title insurance in such circumstances is wise.

All insurances come with a number of disclaimers. A title insurance policy is likewise open to disclaimers. The insurance policy has exclusions that, if not strictly followed, could prevent you from successfully recouping your premium. 

Along with the losses covered by the insurance policy, it’s crucial to comprehend other elements like; how the policy can be claimed; the acceptable forms of proof; the time frame for notifying the insurance company of the loss; policy renewal; limit of indemnity, etc.

Conclusively, real estate investments are safeguarded by title insurance, which also offers protection from financial loss due to omissions in the title and other irregularities in the acquisition of real estate.

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