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Title insurance will protect your investment

April 20, 2018
By ERIC FEICHTHALER - Real Estate Law , Cape Coral Daily Breeze

Dear Mr. Feichthaler,

I am considering buying a condominium from a friend of mine. He is the only owner of it, and it was built in 2010. He has suggested we forego title insurance, and that he sign and provide a warranty deed to transfer the property to me. Do I need title insurance?

-Connor W.

Dear Connor,

Multi-family properties like condominiums continue to be very popular in Cape Coral. First, let's talk about what title insurance is. It is a policy that is issued by a law firm or title company, on behalf of an insurance underwriter, that protects the purchaser of real estate against loss that may occur due to a defect in your ownership. This can be issues like defective deeds in the chain of title, improper legal descriptions of the property, etc. The policy also pays for the costs of court and will defend the seller if there is an issue of title that arises later.

While true that most people who own a condominium have legal rights to it, occasionally they don't. Items like IRS liens and other government liens will follow the property, even if transferred to you. While you do have recourse against the seller, what if they have no money, can't be found or otherwise makes it difficult on you. Without a policy, the costs of court will be squarely on your shoulders.

I always recommend a title policy, especially since, in Lee County, it is customary for the seller to pay for the policy. The cost is typically just over 1/2 of 1 percent of the sales price of the property. Although the percentage risk of an issue may be fairly low, the cost if there is a defect could be steep, including your entire amount of your investment. My advice: write a contract (or have an attorney prepare one for you) laying out all the details, rights and responsibilities. One of them should be the seller providing a full title search, and a title policy protecting your investment.

Eric P. Feichthaler has lived in Cape Coral for 28 years and graduated from Mariner High School in Cape Coral. After completing law school at Georgetown University in Washington, D.C., he returned to Southwest Florida to practice law and raise a family. He served as mayor of Cape Coral from 2005-2008, and continued his service to the community through his chairmanship of the Harney Point Kiwanis Club KidsFest from 2011-2015, which provides a free day of fun and learning to thousands of Cape Coral families, and funds numerous scholarships. He has been married to his wife, Mary, for 14 years, and they have four children together. Recently, he earned his board certification in Real Estate Law from the Florida Bar. He is also a Supreme Court Certified Circuit Civil Mediator.

This article is general in nature and not intended as legal advice to anyone. Individuals should seek legal counsel before acting on any matter of legal rights and obligations.



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