When purchasing a home or other real property, it is important to always remember that what you don’t know can cost you a significant amount in the long run. Problems like missing heirs can lead to major problems for buyers, and the possibility of experiencing such a problem does not end when the sale closes.
In one case, a couple purchased a home from a widow and her daughter following the death of the husband/father. He did not have a will. Following the sale, another man came into the picture and claimed to be the son of the late owner from a former marriage. It was confirmed that he was indeed the son of the deceased man and thus was entitled to a portion of the sale of the home. This, of course, lead to an expensive problem for the couple who purchased the home.
In this case, the absence of a will prevented the title company from discovering the missing heir in a title search of available public records. Unfortunately, these situations are more common than many people realize, and they can lead to serious complications for new buyers.
Protection from Claims from Missing Heirs
Title insurance is intended to protect lenders or buyers from defects or claims against the title, including those stemming from missing heirs, fraud, forgery and a number of other problems. Most mortgage lenders require potential buyers to purchase lender’s title insurance to protect their investment if a problem arises, however, this policy does not protect the buyer.
Protecting yourself from problems that could occur as the result of a missing heir requires the purchase of a separate owner’s title policy. The owner’s title policy is not required, but it comes strongly recommended. Had the couple in the previous example purchased such a policy, they would not have been responsible for the expenses incurred when the son filed a claim.
At Shore Title, we specialize in helping buyers and lenders protect their investment. To learn more about our full range of title services, contact us today!