Monday, April 12, 2010

Title Insurance: What is it? Should I have it?

Q:  What is Title Insurance?
A:  The policy assures a purchaser that the title to the property is vested in that purchaser and that it is free from all defects, liens and encumbrances except those which are listed as exceptions in the policy or are excluded from the scope of the policy's coverage. It also covers losses and damages suffered if the title is unmarketable.  The policy also provides coverage for loss if there is no right of access to the land.

Title insurance will reimburse the policy holder for the policy premium if the title was ever found to be defective and/or cover any legal costs defending the title should an issue arise.

Q:  Is Title Insurance required?
A:  Title Insurance is not required in Mexico.  It is an optional policy that can be acquired at, or anytime after, the time of purchase.

Q:  Who offers title insurance policies?
A:  There are 2 U.S. companies that offer title insurance in Mexico:  Stewart Title and First American Title.  Mayan Riviera Properties often recommends First American Title, as the price of their policies are less overall.

Q:  What is the cost of the policy?
A:   There are 2 costs associated with getting a policy.  The first is the cost for an attorney to perform a complete title research process.  The second is a one-time payment for the cost of the policy.
  • Stewart Title --  Cost of Due Diligence Work by Stewart Title Attorney + Policy Cost.  Cost for the due diligence work is negotiated by the policy holder directly with the attorney.  Policy Cost is $7.00 USD for every $1000.00 USD insured, up to $1,000,000.00 USD.
  • First American Title -- Cost of Due Diligence Work by Approved Attorney + Policy Cost.  Cost for the due diligence work is negotiated by the policy holder directly with the attorney.  Policy Cost is $5.00 USD for every $1000.00 USD insured, up to $1,000,000.00 USD.

Q:  When can I purchase title insurance?
A:  A property owner is able to purchase title insurance at any time.  However, many choose to acquire title insurance during their due diligence research just before the time of purchase.  Those buyers can make their offers on the property contingent on the ability to acquire title insurance.

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