What Is Title Insurance & How Can It Help A Homebuyer?
It is a milestone in a person’s life when they are handed the keys to their first property; the journey is long and hard. Hence, finding the deposit paying stamp duty and legal fees are careful considerations.
When you receive the Title Deeds, the upkeep of the property is now firmly in your hands. Despite land surveys and due diligence, things can go wrong with a building. And with that in mind, title insurance covers you for any unexpected issues.
What Does Title Insurance Cover?
When you take out title insurance in Australia, you can be covered for the following:
Illegal structures –
In the event a previous owner made alterations without seeking local authority approval, your insurance covers all costs. This would typically involve a carport, decking, or pergola and if the structure has to be removed, you are covered by your title insurance policy. You would be surprised to learn just how many Australian homes have partially illegal structures because they failed to seek permission from the local authority.
This could go undetected for years and when the homeowner submits plans for alterations, the structure is discovered. Of course, we are not advocating that you should skip planning permission, this is something every landowner must do.
Incorrect property boundaries –
It is not uncommon for a property owner to discover an error in the property boundaries and if you have the right title insurance, you are covered for every eventuality. This might include structures that encroach on your land without your knowledge or consent.
Property search errors –
In the unlikely event a surveyor made an error when searching your property, title insurance covers you for this. Humans can and do make mistakes and should there be costs involved, it is likely that your title insurance covers you.
Zoning & Planning –
Imagine you buy a plot of land with the intent to build your dream home. Yet you suddenly become aware that the plot is not eligible for residential use, which you were not aware of at the time of purchase! The great thing about title insurance is you are covered for this scenario. Click here for tips to maximise small living spaces.
Fraud –
Fraud can occur when a person sells your land without your knowledge or a fraudulent mortgage is taken out on your property. Con men can somehow manage to secure a loan using fraudulent documentation and they pass through the process undetected. It is only after the fact that the real landowner discovers this, which can be very distressing; at least your title insurance protects you and your asset, should such a thing occur.
One Off Payment
When you take out title insurance for your home, you only have to make one payment and you are covered for an agreed period of time. This certainly brings with it peace of mind. As no one knows what the future will hold. If you are new to property ownership, we recommend taking out title insurance.
No Excess On Claims
While some policies have excess, which means you have to pay a portion of the costs, title insurance has no excess on claims, so you are totally protected for a wide range of scenarios.
Other Important Aspects Of Property Ownership
When you become a property owner, there are responsibilities and while title insurance covers you for all of the above. There are other types of insurance you will need. Fire, floods, or indeed any type of natural disaster can emerge at any time. Without the right cover, you could be looking at a huge bill. A flood can critically damage a structure, as well as destroy the entire contents, while bushfires are a real danger for many rural homes. Talk to an experienced insurance broker about real estate cover and the expert can inform you of what is available and advise accordingly.
Building Maintenance
It makes total sense to take good care of your real estate asset. We recommend an annual roof inspection and every couple of years, have the drains inspected. The sooner you can jump on a building issue, the cheaper the repairs will be. The harsh Australian climate can take its toll on a structure; consider applying a silicone sealant on the roof, which will prolong its life by at least 5 years. Ask your local handyman to inspect every 3 months, looking for water leaks, cracks in walls and ceilings or signs of timber rot.
Repainting The Exterior
Some smart homeowners have rendered the exterior of their home, which provides superior thermal insulation, saving on energy bills. If you have timber frames, prime them up and repaint every 2-3 years to ensure the wood is safe. Also, do make a list when you come across minor issues like squeaky doors, dripping faucets, and scuffs on the floor or walls. Exterior fencing needs close inspection for signs of weather damage, as does gating, paths, and the driveway.
Ground Subsidence
Some areas are more prone than others. If your plot is within a high-risk area, make sure to have insurance for property damage from ground subsidence. You can commission surveys that determine the structural integrity of a building. This is necessary when looking to buy an older property or in an area known for ground movement.
Be Proactive In Your Approach To Building Maintenance
You could sit back and wait until something goes away. Yet this will lead to higher repair costs; regular inspection is a proactive way to view property upkeep, and coupled with prompt repairs by professional tradesmen, your investment will remain in good order.
To conclude, a lot happens after you become the owner of a piece of real estate and with title insurance. For starters, you get coverage for numerous scenarios that could occur sometime in the near future. Search online for an established insurance broker and check out their range of title insurance packages.
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