LegacyTexas Title

Title insurance is the application of the general principles of insurance to real estate titles. But, unlike other types of insurance which protect the insured against loss due to unexpected future events, title insurance protects against loss which may occur due to events that took place in the past. Specifically, title insurance is a contractual obligation that protects the insured against losses that occur when title to a property is not free and clear of defects (e.g. liens, forgeries, claims by missing heirs, recording errors and defects that were unknown when the title policy was issued).

1.  Protection. If a future claim against the title to real property results either in the loss of title to the property or expenses to clear up title defects uncovered by such claims, title insurance will provide compensation up to the face amount of the policy.

2. Legal defense. Should a future claim against the title to property require legal defense, the title company will work with the insured to provide for legal defense of the title and to pay the cost of defense, even if the costs exceed the face amount of the policy. This is true regardless of how many claims are brought during the life of the policy.

3. Up-to-date information. A title search of the public records conducted prior to issuing a title insurance policy reveals the rights a buyer has with regard to future development of the property. These include rights of way, easements, etc., as well as restrictions that may have been placed on the use of the property by previous owners.

4. One-time premium payment. For the cost of a single, one-time premium, title insurance protects the property owner against loss resulting from any title defects to the property covered in the policy for as long as the property is owned.

1.The Owner's Policy. This protects the property owner against loss resulting from defects in the title.

2. The Loan Policy. This insures the holder of the mortgage has a valid lien on the property and indemnifies the holder of the mortgage against loss resulting from title defects insured against.

If a buyer pays cash for a property, only owner's title insurance is needed. In cases where capital is borrowed to purchase the property, the loan policy protects the lender's invested capital by insuring a valid lien in case the mortgage is foreclosed. This protection enables the mortgage lender to sell the mortgage to other types of investors, such as insurance companies, which in turn act to bring in "new" money from other areas of the country for use in local mortgage lending.

Property/casualty insurance protects the property owner against future events that might adversely affect the value of the property, such as fires, floods, etc. It is written for a fixed term for which the company receives a stated premium. At the end of this period, premiums may increase or decrease in line with the company's loss experience. A title insurance policy, on the other hand, is or can be perpetual as to term. Only one initial premium is charged for the risks that are assumed and carried over the years.

The Commitment for Title Insurance consists of four schedules: A, B, C, and D.

SCHEDULE A contains:

• Commitment Date
• Proposed Insured (lender and/or purchaser)
• Amount of title insurance coverage
• The legal description of the property
• How title to the property is vested (who owns the interest in the property and the type of interest)

SCHEDULE B contains exceptions to coverage, those items that currently and may always affect the property.  For example:

• Deed restrictions
• Easements
• Building lines

SCHEDULE C shows items to be resolved prior to closing.  Some examples are:

• Existing liens
• Bankruptcies
• Abstracts of judgment
• Marital status issues
• Probate issues
• Vesting problems
• Mechanic's lien affidavits

SCHEDULE D is a required regulatory disclosure of the officers of the Title Company and Underwriter and also discloses the premiums to be charged for the policy (ies) and the beneficiary (ies) of such premiums.

Contact the Appraisal District for the County you live in, most of the Appraisal Districts has this information on their websites.  In Texas, the Appraisal Districts establish the exemption status of the Property as of January 1. Exemptions can be requested between January 1 and April 30 of each year.

You are entitled to the Over 65 Exemption in Texas as soon as you turn 65 and do not have to wait until the next year to apply.  Contact the Appraisal District in your County and send them proof of age and it will be put on your Property. It is a "portable" exemption and can move with you to another property during the same calendar year.

Yes, but Title Companies in Texas require the Statutory Durable Specific Power of Attorney form and most people only have a General Power of Attorney.  The POA must be specific to the transaction in question and can be prepared for you by the Title Company's Attorney.

A General Warranty Deed is the most used form, and called for in the TREC Contract forms.  In it, the Seller is warranting their title for the entire existence of the Property.  A Special Warranty Deed limits the Seller's warranty to the time that particular Seller owned the Property and thus is the preferred form for Sellers like Banks after a foreclosure, Estates, and Relocation Companies.  The coverage to the Buyer in the Owner Title Policy remains the same with either form.

Yes, Texas provides for credits on a sliding scale from 40% to 15% based on the age of the loan to be paid off.  You do not have to close your refinance with the same Title Company you closed with on your purchase to benefit from this credit.

This is the only upgrade available to the Owner Title Policy in Texas and for the payment of an additional 5% premium, the risk of a survey being wrong and causing a title issue is shifted from the Surveyor, who may or may not have assets or errors and omissions coverage to pay for a claim, to the title insurance underwriter, who is backed by legally imposed reserves.  It is often requested on Properties that are unusual in size or shape or in situations where the buyer is concerned about an encroachment or protrusion of an improvement.