Why New Homes Need Title Protection

June 6th, 2013

Title insurance is necessary on a newly constructed home even though the home itself has no title history. Because your new home was built on unimproved land, there may have been many prior owners of the property and with those prior ownership comes the uncertainty of a clear chain of title. Additionally, obligations to contractors who worked on the home construction may be outstanding, jeopardizing clear title to the property.

Unlike home insurance and car insurance, which focus on possible future hazards, title insurance is a safeguard against loss from hazards and defects already existing in the past. An Owner’s Policy of title insurance from Signature Escrow & Title Services offers the best protection from the following types of risk exposure associated with the purchase of a new home:

  • Transfer of title from the previous landowner to the builder was done improperly
  • Mechanics liens filed by contractors or subcontractors
  • Existing liens not uncovered in a search of the title
  • Unpaid tax assessments
  • Bankruptcy proceedings affecting the development
  • Delinquent payments on the builder’s subdivision loan balance