Title insurance real estate and its cost. What is title insurance?

Under current law, the ownership allows the property owner to possess it and dispose at their discretion. However, in some normative acts stipulate the grounds on which this possibility may be lost or challenged. As a result, the object will be reclaimed from the owner. In order to avoid such a situation the law provides for title insurance of real estate. Consider what it is.

General information

Title insurance real estate represents protection against the risk of material losses that may arise from a bona fide purchaser in connection with the loss of the right of ownership. Such a threat appears in the event of defects in documentation. Title actually referred to the paper confirming the exclusive right of possession of the property.

Causes of risk

Real estate objects are often the subject of a long chain of transactions of purchase and sale. If it turns out that one of them was done once with the violation of the legislation and can be challenged (e.g., heirs), in accordance with the decision of the court, the right of ownership, subsequent owners will be cancelled. This may occur if, for example, in the privatization of the object was not taken into account the opinion of a minor, or one of the owners was in prison. This situation is typical for the secondary housing. In the primary market, the loss of property rights occurs in the case where the developer is trying to sell one apartment to several buyers.

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Why to protect themselves from the risk?

Title insurance real estate transactions serves as collateral to a bona fide purchaser, if the object is reclaimed by the owner. The main circumstances under which this can occur are:

• The conclusion of the contract of purchase and sale with the participation of legal entities legally incapable or incapacitated citizens, in violation of the law.
• The Right of ownership after exclusion of services from third parties, and so on.

Title insurance is one of the requirements of a number of banks issuing entities the loan to buy housing. Protection against the risk of material losses acts as a must-have item when getting a mortgage.

Subject of the contract

Title insurance can be issued for residential or nonresidential buildings, parts of buildings or premises, land plots. In addition, to protect you and the property interests of the owner. The subject of insurance in such cases is the right to dispose of, possession and use of property.

The invalidity of the contract

Title insurance includes several cases in which the owner is given the opportunity to defend their rights. As such events, for example, is the decision of the court. When it enters into force, the rights of the owner are void. As one of the special cases is the invalidation of the contract of purchase and sale. The deal could be considered such if:

1. Contrary to the law and other regulations.
2. Enclosed, as opposed to the foundations of morality and law.
3. Covers another transaction.
4. Does Not imply the occurrence of the relevant legal consequences.
5. Done partially or fully incapacitated citizen or legal entity legally incapable.
6. Enclosed by minors aged from 14 to 18 liters
7. Committed under the influence of delusion.
8. Carried out by a competent person who did not realize their actions and are not able to control them.
9. It Lies under the influence of threats, violence, fraud, malicious agreement of difficult circumstances.

Title insurance real estate: value

The Amount is determined based on various factors. There are the following criteria that provides title insurance:

• Price according to the contract of purchase and sale.
• The Value of assessment of BTI.
• Market (actual) value area as at the date of insurance.
• Other factors. These include, for example, include the size of loan secured by a residential area.

The Amount of insurance shall not exceed the actual value of the property. During the term of the contract its size can be changed. For example, when the owner of a major overhaul, it can be increased in proportion to the costs. The owner shall be paid compensation equal to the amount of the contract for title insurance apartment. The value of the lost assets – not the only payment that provides upon the occurrence of the relevant circumstances. Kompensiruet the court costs, pay a lawyer representing the interests of the owner. On the amount of money, among other things, affect:

• The validity of the insurance contract.
• The Level of risk that is established of legal expertise.

In accordance with term insurance for protection against all threats, that is, when the loss of the rightof ownership on any of the above circumstances, the rate will be:

• In the year – 0.4-1%.
• Three years – 1.5-2%.
• Ten years – 2.2-4.0%.

Thus, the contract may be concluded for a period of 1 to 10 years. Under domestic law, the sale can be challenged within three years, and in some cases, this period may increase up to ten years.

Subjects

Title insurance is available for legal entities, individual entrepreneurs and citizens who are owners of the property. However, they must be registered on the territory of Russia. The first step before the conclusion of the insurance contract will be the collection of all necessary paperwork relating to the transaction. On the basis of these documents will be evaluated the possibility of filing a claim later against the new owner. In accordance with the level of risk the insurer will calculate a rate. The next step will be the selection of a company with which the contract will be signed. It is necessary to carefully examine the authorizing documents (licenses), their financial status. In addition, you should review the terms and conditions for the provision of their services. The entire list will need to choose the most appropriate company. the final stage is prepared and negotiated an agreement. For its conclusion it is necessary personal presence of the owner in the office of the company. As a General rule, one copy of the document remains the representative of the company, the second is sent directly to the owner. Upon the occurrence of the insured event to receive compensation will be required to provide documented evidence of the events.