Title insurance & Conveyancing indemnity

 

 

 

 

 

 

 

 

 

 

 

Title insurance is a type of insurance that protects homeowners and lenders from financial loss due to defects in the title of a property. A title defect refers to any issue that affects the ownership of a property, such as unpaid taxes, liens, or other claims against the property.

Title insurance policies are typically purchased during the homebuying process and are issued after a title search has been conducted to ensure that there are no outstanding claims or liens on the property. The insurance policy will cover the cost of defending against any claims or legal disputes related to the title, as well as any financial losses that may result.

There are two types of title insurance: lender's title insurance and owner's title insurance. Lender's title insurance protects the lender's interest in the property and is typically required as a condition of obtaining a mortgage. Owner's title insurance, on the other hand, protects the homeowner's investment in the property.

Title insurance is a one-time cost, typically paid for at the time of closing, and the policy remains in effect for as long as the owner or their heirs own the property. While it is not required by law, it is often recommended to protect both the lender and homeowner from any unforeseen title issues that may arise.

Conveyancing indemnity insurance is a type of insurance that is designed to protect property buyers, sellers, and their conveyancers against financial loss resulting from defects in title, planning permission, or building regulations. There are several types of conveyancing indemnity insurance available, including:

1. Defective Title Insurance: This type of insurance covers the buyer in the event of a defect in the title, such as a missing or fraudulent transfer or a lien on the property.
2. Planning Permission and Building Regulations Insurance: This type of insurance covers the buyer in the event that the property was built or altered without proper planning permission or building regulations approval.
3. Restrictive Covenant Insurance: This type of insurance covers the buyer in the event that there are restrictions on the use of the property, such as restrictions on building or alterations.
4. Chancel Repair Insurance: This type of insurance covers the buyer in the event that they are liable for the repair and maintenance of a local church or other religious building.
5. Flood Risk Insurance: This type of insurance covers the buyer in the event that the property is located in an area at risk of flooding.

Conveyancing indemnity insurance is usually purchased by the seller or the buyer's conveyancer during the conveyancing process, and the policy remains in effect for as long as the policyholder owns the property. It is important to note that conveyancing indemnity insurance is not a substitute for a thorough due diligence process and should be used as a last resort to protect against any unforeseen issues that may arise.

 

 

 

 

What are the usual Disbursements on a conveyanying quote

 

 

 

 

 

 

 

Disbursements on a conveyancing quote typically refer to additional fees and expenses incurred by the conveyancer or solicitor in carrying out the conveyancing process on behalf of the client. These disbursements may include various expenses such as:

1.      Search fees: The cost of obtaining various searches from local authorities and other relevant organizations, such as local land charges, environmental, water and drainage, and chancel repair liability searches.

2.      Land Registry fees: The cost of registering the property transaction with the Land Registry.

3.      Bankruptcy search fees: The cost of conducting bankruptcy searches against the parties involved in the transaction.

4.      Property fraud check fees: The cost of conducting property fraud checks to ensure that the transaction is not fraudulent.

5.      Stamp Duty Land Tax (SDLT): A tax levied by the government on the purchase of property above a certain value.

6.      Telegraphic Transfer (TT) fees: The cost of transferring funds between banks.

It's important to note that disbursement fees can vary depending on the location and complexity of the transaction, and the specific services required by the client. It's always advisable to clarify which disbursements are included in a conveyancing quote and which are not, to avoid any surprises later on.

In most cases, disbursements are not refundable if a property purchase fails. This is because disbursements are third-party costs that the conveyancer or solicitor incurs on behalf of the client during the conveyancing process. These costs are typically paid upfront and are non-refundable even if the property transaction falls through for any reason.

However, some conveyancers or solicitors may offer a no-move, no-fee guarantee, which means that they will not charge their legal fees if the property transaction fails to complete. This guarantee may include some disbursements, but it's important to check with the conveyancer or solicitor to clarify which disbursements are included and which are not.

It's also worth noting that some disbursements may be transferable to a new property transaction if the original purchase falls through and the client decides to buy a different property. Again, this will depend on the specific terms and conditions of the conveyancer or solicitor, so it's important to clarify this with them beforehand.

 

 

 

 

 

What title issues can arise when buying a property?

 

 

 

 

 

 

 

 

 

 

 

 

What title issues can arise when buying a property?

 

There are several title issues that can arise when buying a property. Some of the most common ones include:

1.      Liens and encumbrances: These are legal claims or debts against the property that can impact its ownership. They can include mortgages, property taxes, mechanic's liens, and other liens or encumbrances that may be recorded on the property's title.

2.      Boundary disputes: These are disagreements over the property's boundaries, which can arise if the property's boundary lines are not clearly defined or if the property's legal description is inaccurate.

3.      Easements: These are rights granted to others to use the property for a specific purpose, such as a utility company having an easement to run power lines through the property.

4.      Judgments and lawsuits: These are legal judgments or lawsuits against the property owner that can impact the property's ownership or title.

5.      Fraudulent conveyance: This is when a property is sold or transferred illegally, such as when the seller does not have the legal authority to sell the property.

6.      Unpaid taxes: If the previous owner of the property did not pay property taxes, the new owner may become responsible for paying them.

It's important to conduct a thorough title search before purchasing a property to uncover any potential title issues that could impact the property's ownership or value.

Liens and encumbrances are legal claims or debts against a property that can affect its ownership. They can arise from a variety of sources, including mortgages, unpaid taxes, unpaid contractor bills, and court judgments. When a lien or encumbrance is attached to a property, it means that the property cannot be sold or transferred without satisfying the outstanding debt.

Mortgages are the most common type of lien. When a property is mortgaged, the lender places a lien on the property to secure the loan. If the borrower fails to repay the loan, the lender may foreclose on the property and sell it to satisfy the debt.

Unpaid taxes can also result in liens on a property. If the property owner fails to pay property taxes, the local government can place a lien on the property. The government can then foreclose on the property and sell it to satisfy the unpaid taxes.

Contractor liens are another type of lien that can arise when a property owner fails to pay a contractor for work performed on the property. In some cases, contractors may file a lien against the property to secure payment for their services. The lien can then be enforced by a court order to force the sale of the property to satisfy the debt.

It's important to conduct a title search before purchasing a property to identify any liens or encumbrances that may be attached to the property. If a lien is discovered, the buyer can negotiate with the seller to have it removed before completing the sale. If the lien cannot be removed, the buyer may need to pay off the debt before taking ownership of the property.

Boundary disputes can arise when there is disagreement over the location of a property's boundary lines. These disputes can be caused by a variety of factors, including inaccurate surveys, unclear legal descriptions, or changes to the physical landscape.

For example, a dispute may arise if a property owner builds a fence that encroaches on a neighbouring property, or if a tree falls and damages a neighbour’s property, and the two parties disagree over where the boundary line is located.

Resolving a boundary dispute can be complicated and expensive. In some cases, the parties may be able to reach an agreement through mediation or negotiation. In other cases, legal action may be necessary to determine the proper boundary line.

To avoid boundary disputes when purchasing a property, it's important to obtain an accurate survey of the property before completing the sale. A survey will identify the property's boundary lines and any potential encroachments. It's also a good idea to review the property's legal description and check for any easements or other rights that may affect the property's use or value.

An easement is a legal right granted to someone to use another person's property for a specific purpose. Easements can be granted for a variety of reasons, such as providing access to a landlocked property or allowing utility companies to run power lines or water pipes across a property.

There are two main types of easements: appurtenant and in gross. An appurtenant easement is attached to a specific property and benefits the owner of that property, while an easement in gross is granted to a specific person or entity, such as a utility company.

Easements can affect a property's use and value, so it's important to be aware of any easements before purchasing a property. The property's title report should disclose any existing easements, but it's also a good idea to review the property's legal description and check for any rights of way or other access rights that may affect the property.

If an easement exists on a property, it cannot be removed without the consent of the party who holds the easement. However, the property owner may be able to negotiate with the easement holder to modify the easement or reach a new agreement. In some cases, the easement may also be terminated if it is no longer needed for its original purpose or if it is abandoned.

It's important to understand the implications of any existing easements before purchasing a property, as they can affect the property's use, value, and potential for development.

Fraudulent conveyance is a legal term that refers to the illegal transfer of property from one person to another. A fraudulent conveyance can occur when a property is sold or transferred without the legal authority to do so, or when the seller intentionally conceals information about the property's ownership or encumbrances.

Fraudulent conveyance can occur in a variety of situations. For example, a property owner may attempt to sell a property that is subject to a lien or other encumbrance, without disclosing the debt to the buyer. Alternatively, a property owner may transfer a property to a friend or family member to avoid creditors, while still retaining control over the property.

Fraudulent conveyance is illegal and can have serious consequences for both the buyer and seller. If a fraudulent conveyance is discovered, the transaction may be voided and the property may be returned to the original owner. The parties involved may also face legal action, fines, and other penalties.

To avoid fraudulent conveyance when purchasing a property, it's important to conduct a thorough title search and review all legal documents related to the property. This can help uncover any potential issues with the property's ownership or encumbrances. Working with a qualified real estate attorney can also help ensure that the property is being sold legally and that all parties involved are acting in good faith.