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Hi everybody - George Sourris, Empire Legal.
Today's topic: Title Insurance - a serious thing to consider for QLD property purchases!
What is title insurance? That's a great question. It's often overlooked or not even discussed with property purchases. Let's check out what it's all about. Title insurance is, as the name suggests, an insurance product. However, it is unique. How, you ask? Well, traditionally, insurance covers you for a future event. Title insurance however, covers you for an event that has happened in the past, that is yet to be uncovered. The coverage is for the title, or ownership, of the property.
Title insurance protects property owners from certain unexpected risks surrounding property ownership. These risks affect a property owner's rights to use and occupy their land, making title insurance an essential safeguard when it comes to buying a property.
Unlike most insurance policies, title insurance is a one time premium payment for that has no expiry (while you're the owner of the property), not an ongoing commitment for payment premiums.
All right, but what does title insurance cover?
Well, each insurance company will have their own terms and conditions, so it's important to check out the product disclosure guidelines.
At Empire Legal, we work closely with Stewart Title. As per their website, for residential property purchases, their title insurance will protect clients from a wide range of property ownership risks, including:
unapproved building work, enforcement action by a local authority in relation to non-approved structures which have been built by any previous owner of the property without the required council permits, or which did not comply with those permits for rural properties the covers limited to the main residence, including sheds, carports, garage, and used for residential purposes, and any swimming pool, or enforcement action by a local authority in relation to non-approved structures which have been built by any previous owner of the property without the required council permits, or which did not comply with those permits.
Keep in mind guys, there's a few T&C's for rural properties, so you want to make sure that you are reading the disclosure statement. This coverage here is capped at $160k.
Registration gap. This is where someone else lodges a dealing during the registration gap which prevents your interest from being registered or recorded, so you'd be covered for that. Fraud, forgery, identity theft. So, loss due to fraud, forgery, identity theft, which results in you being deprived of your ownership of the property.
Someone else claiming ownership of a part or all of the land by adverse possession.
Boundary and survey. So, forced removal or relocation of a structure because it encroaches over an easement or onto a neighbour's property and adverse matters affecting title that would have been revealed in an up to date survey report. So please note that boundary and survey coverage will NOT apply to land where it's larger than 50 acres.
Planning and title defects. So, loss due to non-compliance with existing zoning and planning laws, unregistered easements and covenants, access orders, access rights for a right of way, a lack of legal access and defects to title of the land.
Outstanding rates, taxes and levies. So, outstanding rates and taxes on the property which the insured is liable for as the current owner.
This coverage does NOT apply to land transfer duty, land stamp duty, foreign buyer duty or foreign investor surcharge, or any levies or special levies struck AFTER the policy date.
Unpaid local infrastructure or local improvement levies. So, errors made by the insurer's practitioner or local authority in respect of unpaid local infrastructure or local improvement levies or charges, due to a local authority which may result in an encumbrance, charge, lien or writ on title.
Risks occurring after settlement. Stewart Title also provides cover against the following risks where circumstances create or give rise to these occurring after settlement: fraud, forgery, mistake, which may lead to someone else claiming an interest in the land, someone else building a structure ( other than boundary walls or fences, which encroaches on the insured land), and a local authority assess supplemental rates or taxes, not previously assessed against your property for any period prior to the policy date.
Our clients have had great experiences with Stewart Title, they're happy to chat over the phone about their services, and it's obligation and commitment free. So, you can speak directly with them and see if the product is for you, and they can help you with a policy.
If not, that's totally fine too. We're just here to educate that it's an option that you have as a Queensland buyer. We send title insurance information out as part of our standard pack of paperwork to all our buyers, just so they know the product exists. If you don't know about it, and you can't decide if it's a good fit for you, you should give them a call and they can let you know more about it.
What does title insurance cost? The question on everybody's mind. How much? Well, it depends. Stewart Title bases their one time policy fee on the purchase price. For dwellings around $500,000 it's $500. For $1,000,000 properties, it's about $1,000. For a $2,000,000 property, the fee is approximately $2,000.
You can see pricing on their website. Again, we're not affiliated with Stewart Title, so there's no need to go through us. We inform our purchaser clients and advise them of what Title Insurance does. But at the end of the day, whether you decide to get it or not is absolutely at your discretion, and the company you choose is absolutely at your discretion.
So, why do I need it? Well, you don't technically "need" title insurance in the same way that you don't "need" car insurance or home and contents insurance. Most people opt to get insurance for peace of mind and to be protected. Considering the cost for this Queensland property owner, it really is a no brainer.
I do encourage you to do your own research. If you like, we're more than happy to connect you with the right people. Otherwise, you can head over to Stewart Title's website.
So, Title Insurance. Now you know what it is. I can almost guarantee you know someone in the Queensland property space that knows nothing about title insurance.
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George Sourris. Empire Legal.
If you have any questions, you can email me: george@empirelegal.com.au.
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Thanks for reading everybody. See you on the next one.
Ladies and gentlemen, please keep in mind that all advice is general in nature and does not constitute legal advice. This is authorised by George Sourris, Empire Legal, Brisbane, Queensland, Australia.
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Note: all information is general in nature and as each matter is unique please contact our office for tailored advices: the above does not constitute legal advice.