How Title Insurance Can Protect You In A Real Estate Transaction

Title insurance can be an interesting tool to allow us to make a real estate transaction, when a risk arises due to an irregularity related to the property. In such a case, it is the responsibility of the person who refinances his property by means of a new mortgage loan or of the person who sells his property. Indeed, the seller having undertaken to provide his buyer with a clear title, it is he who is responsible for the payment of the policy in the event of the discovery of an irregularity.

However, you have to be careful during a real estate transaction, if you are the buyer. Taking out such insurance does not solve the problem. At the time of reselling this property, if the problem still exists, the buyers will in turn have to pay for such a policy and they will also have to pay more with each mortgage renewal.

Common Situations

There are a few common situations in which title insurance may be purchased. The coveted property presents non-compliances with municipal regulations, such as non-compliant margins which do not benefit or have an acquired right, another swimming pool, or another element found in an easement, in contravention with municipal regulations, or in competition with the right of a third party.

First of all, a solution to settle the situation permanently should always be sought. Thus, a minor derogation could be granted by the municipality, a letter of tolerance could be issued by the person who benefits from the easement or even an easement from a neighbor could, for example, be obtained, depending on the problem in question. Nevertheless, it happens that a correction is not possible or that it is impossible to obtain it within the prescribed time.

An Example

Let’s say you buy a property without a legal warranty, at the risk and peril of the buyer: the legal warranty has two aspects, namely the warranty as to title and the warranty against latent defects. For latent defects, there is no additional protection offered and the sentence says so – the buyer takes the house at his own risk. For title defects, title insurance can provide some protection.

Indeed, in the event of the discovery of a title defect, then normally in a rebound lawsuit: the buyer sues his seller, who sues his seller, who sues his seller, etc. If you buy without a legal warranty and resell to someone who eventually resells themselves and so on, guesses where that great rebound will stop if a previous problem is discovered? On your head! To protect yourself, you may want to purchase title insurance to compensate you in this situation. Note that the costs relating to this insurance are then attributable to the buyer.


Sales without legal guarantees can be good business but present an increased risk. You could mitigate this risk by purchasing title insurance to protect you in this circumstance. Speak to a Title Insurance Florida company to know what should be done in your best interest.