What is a Title Policy and Who Issues One?

In real estate transactions, it is customary to issue a title policy to cover the buyer in case a third party claims an interest in the property after the property is purchased. Although it is not required by Florida law to obtain a title policy when you purchase a home, it is always recommended. And if the buyer is using a loan to finance a portion of the purchase the bank will require the buyer to obtain a title policy.

A title policy is basically an insurance policy issued by a “title agent” who works with an insurer. The title agent completes the closing process by making sure that the title to the property is free and clear of encumbrances (liens, judgments, etc.). And if there are any such encumbrances, the title agent makes sure that they are all paid at the closing.

There are two types of title agents. Title Agencies are the first type and are approved by an insurer to write title policies. Title Agencies may or may not have an attorney working at their agency.

The second type of agents are law firms who are also approved by an insurer to write title policies. The benefit to having a law firm complete a closing and issue a title policy is that an attorney will always be involved in the process in charge of looking after your rights. If an issue arises in the closing, the attorney is already involved in the closing and will immediately provide legal advice so that you can make an informed decision.

Whether you chose a Title Agency or law firm to handle your closing you will pay the same amount for your title policy. This is because the cost of the title policy to cover the buyer is fixed under Florida law based on the amount of the purchase price of the real estate.

At Perez-Roura • Ainsworth, we go beyond handling real estate closings and issuing title policies by advising our clients on matters such as the best manner to own the property (i.e. individual name, through an LLC, trust, etc.) and even potential tax issues. We are able to advise our clients on these separate matters due to our training and experience in the areas of corporate law, tax law, and litigation.  Having all of these areas under one roof provides our clients with on-demand, seamless support to help plan  their real estate investment.

Feel free to contact us by email at info@pra-law.com or in our Miami office at (305) 600-3816 if you are planning the sale or purchase of a property in Florida.

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