When you purchase a home or farmland in North Dakota, you are buying the physical structures and the legal right to own the land. However, hidden defects on a title can emerge long after closing, regardless of how thorough the search was.
While title defects can be a significant hurdle, they do not have to derail your real estate investment. Obtaining title insurance can be crucial in safeguarding your finances and property rights from these title defects.
Fraudulent or forged documents
Identity theft and forgery can be common in many real estate transactions. If someone pretending to be the land owner signed a previous deed or mortgage, that transfer becomes void. Having title insurance can protect you from the financial loss resulting from these fraudulent activities.
Unknown liens
Despite paying your dues after purchasing property, the previous owner might not have done the same. Unpaid property taxes, homeowner association dues or mechanic’s liens from years ago can threaten your ownership of the home. Title insurance can help you cover the cost of resolving these debts.
Missing heirs
If a former owner dies and the real estate was not probated correctly, a previously unknown heir could come forward claiming a legal interest in your property. You can either reach an agreement with them or file a quiet title action to fix any issues with the property deed.
Either of these scenarios can be costly and time-consuming. However, a title insurance policy can simplify the process and make it less expensive.
Boundary and survey disputes
An old fence or landmark on a property might not align with its legal description. This can cause conflict if a neighbor claims a portion of your land due to a physical boundary or an inaccurate historical survey. When you have title insurance, the policy can help cover your financial losses and the costs of seeking legal guidance.
Protecting your investment
When purchasing property, title insurance can cover the costs associated with resolving title defects. By securing a policy, you can ensure you have long-term security and clear ownership of your land or home.