Title insurance when buying an apartment: registration of a policy, conditions

Today we will consider a rather interesting issue - title insurance of real estate. What is it and what is it for?

First of all, this topic may be of interestthose people who plan to invest in real estate. If in the near future you plan to purchase an apartment, a house or a holiday plot - title insurance can save you from many troubles.

The fact is that when you buy a home, the rightproperty on which has repeatedly changed the owner, you put yourself in a dangerous situation. Your right to the acquired property can be at any time challenged by one of the previous owners. There can be many grounds for this. Insurance title is just designed to protect you from such risks. Let's understand more.

What is title insurance

So, what is meant by the term "titlereal estate insurance? What it is? So called the insurance product that provides protection against the risk of losing the right to property if the transaction is challenged and invalidated. Interestingly, such a policy protects a person not from what may happen in the future, but from the possible consequences of what has already happened once. At the time of drawing up the contract of title insurance, such events are not known by any of the parties and do not show themselves.

The name of the described policy is derived from the phrase "legal title", which means a document confirming the exclusive right of ownership to a specific property.

Today, such contracts are most oftenconcluded simultaneously with the contract for real estate insurance. Such property is quite often the object of long legal chains. The same apartment can be sold several times, become the object of donation, alienation by any means, inheritance and transfer from hand to hand, on the basis of a decision of the judicial authorities. If at any of the listed stages legal inaccuracies were made, then not only this particular transaction, but all subsequent ones can be challenged and declared invalid. As a result of such actions, the current homeowner loses the rights to the acquired property. Title insurance, reviews of which are the most positive, protects the owner from such a risk.

Why this is necessary

The main result that a person gets fromThis type of service - compensation for losses incurred in the event of loss of ownership of an acquired apartment, house or cottage. In addition, the contract may provide for other compensation related to the compensation of additional losses associated with the insured event.

The insurance case is recognizedthe documented fact that you suffered real damage associated with the loss (in whole or in part) of the right of ownership of housing. At the same time, events occurred regardless of your will and on the basis of a court decision that has already entered into force.

What does title insurance protect against

Acquisition of any property, and especiallyhousing requires a balanced and responsible approach. It is important to take into account every little thing, every possible trouble. According to official statistics, a little over one percent of transactions concluded in real estate are recognized by the court as invalid. It seems to be a little bit, but this is if the matter did not concern you personally.

The reasons for challenging may be different.For example, the privatization did not take into account the interests of the child. This is a reason to challenge the deal. And this can be done even in two or three years.

Since it is housing that is most often subjected to fraudulent schemes, title insurance when buying an apartment will guarantee that your money will not move into the pockets of “black” realtors.

Of course, before the conclusion of the transaction is worthcheck out all the ins and outs of purchased housing. But it can be very problematic. The fact is that archives most often refuse to provide data on all transactions previously completed with property. They motivate their refusal by the fact that the data on the last owner is supposedly sufficient. In practice, this is far from the case. A much earlier owner may appear, and then the rights of all subsequent owners, no matter how many, will be recognized by the court as invalid. That is why property title insurance makes the process of buying and selling much safer.

When a deal can be challenged and invalidated

There are several situations in which the conclusion of a transaction may be invalidated:

• at registration false documents were provided;
• the acquired object is seized due to the presence of outstanding debts of one of the previous owners;
• the apartment was not bought from the true owner;
• the seller kept silent about the disagreement of his “second half” on the transaction;
• heirs of one of the former owners claim for purchased housing.

In some other cases, title insurance for an apartment may also protect a new owner from damages resulting from the loss or restriction of property rights:

1. At the time of the transaction, the seller was a minor, suffered from a mental disorder, or was limited in legal capacity.
2. The documents were compiled in violation of applicable law.
3. The rights of a trustee are no longer valid in cases where the seller’s transaction was not made personally.
4. The deal was fraudulently or under the influence of violence or threats.

How much does it cost

So you decided to get title insurance.How much does such a policy cost, and what does its cost depend on? The amount of insurance is accepted on the basis of the agreement of the parties. Most often it corresponds to one of these parameters:

• market (actual) cost of housing at the time of signing the contract;
• the cost of acquiring such housing (replacement cost);
• replacement cost, that is, the amount required to build the same object;
• the amount specified in the loan agreement (if any);
• the cost of housing under the contract, in accordance with which the ownership was obtained.

What influences the size of the insurance rate

The payment that you have to make as an insurance also depends on several parameters:

• the sum insured;
• the number of risks covered in the contract;
• history of the house or apartment (the number of previous owners);
• availability of the franchise and its size;
• features of the regulatory framework that existed at the time of the conclusion of previous transactions or privatization;
• the term of the policy.

Depending on all these factors, the tariff for title insurance can be calculated in the amount of 0.1 to 5% of the sum insured. It all depends on the terms of the contract.

Design rules

This type of insurance is relevant not only in the case ofhome purchase in the secondary market. Title insurance of real estate will protect you also when buying a home in a new building. For the correct execution of the contract you need to prepare:

1. A document confirming the ownership of the object (purchase, donation, inheritance, etc.).
2. Certificate of state registration.
3. The registration certificate of housing.
4. Extract from the house book.
5. Plan a house or land (if we are talking about the insurance of these objects).

What to do when an insured event occurs

If a situation occurs when title insurance is still useful, you should immediately notify your SC. You need to personally arrive there and in the shortest possible time provide such documents:

• civil passport or other document proving your identity;
• valid title insurance contract;
• the original and a copy of the court decision establishing the fact of alienation of the acquired property.

After a thorough study of the documents, the IC is obligedpay you the full amount of the contract. In addition, if an item was added to the insurance for compensation of other expenses, for example, court costs, the money will also be refunded to you.

Insurance features

Unfortunately, the insurance contractThe title is not too popular in our country. Moreover, many people do not even realize that such a possibility exists. Therefore, when concluding an insurance contract, mistakes are often made, the presence of which leads to serious consequences when an insured event occurs.

When signing the contract should pay attention to such points:

1. It is not necessary to sign an agreement in whichthere is an exhaustive list of insurance risks. It is likely that some situation will simply not be taken into account, which will subsequently lead to a refusal to pay. It is best if the contract states that the loss of the right of ownership is subject to compensation, regardless of the reason.
2. Some IC offer a policy in whichit is written that reimbursement is due only for transactions made with your direct participation. This can also negatively affect the receipt of payment.
3. Quite often when making a deal withreal estate in the contract prescribed a much smaller amount than it really is. This is done in order to minimize the amount of tax. Therefore, when title insurance is very important to enter into the contract is the actual amount of the transaction, and not the one that is spelled out in the contract of sale.

Subtleties of title insurance for a mortgage

Quite often, along with registration of mortgage banksoblige the client to take out life and health insurance. This is not surprising, because the bank is interested to receive their money in any case. Nobody usually insists on title insurance, because the bank is not interested in it, but you yourself. After all, even in the event that the purchase is declared invalid, the bank will have to return the money to you.

By the way, mortgage title insurance is veryprofitable to the buyer. Indeed, before entering into a contract, an insurance agent is obliged to carefully check all the nuances of the transaction and, if anything, provide the client with the assistance of a qualified lawyer. In general, do everything possible to avoid the occurrence of the insured event.

When insuring a mortgage title you need to remember that you need to enter in the contract the amount not less than you have to pay in the end. Yes, and the insurance contract itself should be concluded for the same period.

When insurance does not help?

Title insurance is not absolute.a panacea. Unfortunately, there are risks for which it does not work. If after the purchase of housing there is a burden that is not associated with the loss of property, the title policy will not help you. What does it mean?

Here is a small example.You purchased an apartment, and after three years it turned out that one more person was registered in it (without the right of ownership). He was absent at the time of the transaction (for example, he was in prison or was working abroad), and now he has returned. If he has nowhere else to live, then in accordance with the fortieth article of the Constitution of the Russian Federation, he will have the right to live in your house. In this context, the situation will not be recognized as an insured event, since no one claims the right of ownership at all.

So do not count on the titleinsurance, as a panacea for all ills. In order to avoid unpleasant situations, you need to independently make the maximum amount of effort to protect yourself from all risks.