What is Title Insurance?

Did you know … Title Insurance is something you should consider NOW as part of your purchase transaction … EVEN BEFORE EXCHANGING CONTRACTS?

What is Title Insurance? Title insurance is an insurance policy which can cover you for costs arising from matters you do not know or are not disclosed by the Vendor as part of the normal conveyancing procedure.

For example:
Illegal Building Works undertaken by a Vendor or any previous owner,
Outstanding Notices or Orders affecting the property issued by a Government department (Council, Sydney Water, Ausgrid) or an encroachment by or onto your property revealed by a current identification survey.

Illegal Building Works typically include: construction of a deck, expansion or conversion of an attic, construction of a pergola, enclosure of balconies or rooms, rear extensions, conversion of a garage into a living space or bedroom, internal renovations of a kitchen, bathroom within a strata complex.

What can trigger an Outstanding Notice or Order?
Lack of final occupation certificate for renovations completed, fire order for a strata complex; swimming pool non-compliance, complaint from a neighbour or tenant relating to an illegal improvement or structure, or the required inspections by Council if you lodge a Development Application.

Summary of Key Features of Title Insurance:-

• One off premium – based on the purchase price
• No excess in the event of a claim
• No restriction on the number of claims which you can make
• Coverage up to the value of the purchase price plus 200% inflation increase* (*dependant on reason for claim)
• Policy coverage is effective from date of settlement
• Insurer will deal direct with the Authority (eg, Council) on your behalf to reach a resolution for the parties involved.
• Insurer will cover your legal fees incurred to defend any claim

What you need to know: By electing to purchase a Title Insurance policy you are agreeing to not undertake any independent search of council records or other Authority which is likely to trigger an inspection of the property and potentially a work order or notice.

Title Insurance is offered by two companies – First Title (www.firsttitle.com.au/home) and Stewart Title (www.stewartau.com). Some good examples of current claims made can be found on their websites.

If any of the above issues are disclosed as a result of your enquiries, a search of Council records, via the sale Contract or by documentation provided by the Selling Agent, the Vendor or another party, this is called a Known Risk. You may still be able to apply for Title Insurance however your application would be assessed on a case by case basis and the insurance coverage offered is generally limited.