Beware – Title Insurance “Lite” – Looks GREAT, Less COVERAGE!
John Bethell Title always performs a complete search and discloses any recorded covenants and restrictions. We do this at no additional cost to the parties involved.
Over the last 2-3 years, more title companies from Indianapolis and areas outside of Bloomington are closing transactions on Monroe County properties. Here’s the problem…many of these companies commonly do not do a complete title search, showing all specific covenants, restrictions and easements that affect a property. In addition, they attempt to dodge any liability by adding blanket, non-specific exceptions to the title policy. These blanket, non-specific exceptions typically read like this:
“any and all recorded covenants, conditions, restrictions (CC&R) and easements.”
This practice is a cost-cutting move but the cost savings is not passed onto their clients. The title company is deciding not to spend the time or money on a complete title search, dating back to the original plat or before that, which is often necessary to uncover specific CC&Rs and easements. Instead, they shortcut the process with a generic, catch-all exception. Title agents engaging in title insurance “lite” only disclose this practice by adding the exceptions into their title work.
Lenders have caught on to this practice and now routinely receive title coverage that protects them from loss from CC&Rs and easements, whether disclosed in the policy or not. Unfortunately, this coverage is not available to buyers, leaving them at risk.
Before choosing a title company, Realtors should consider if this practice is in the best interests of their clients. After closing, a buyer could be devastated to learn that an easement exists where they wanted to construct an addition or that placing a manufactured home on the property like they had planned is prohibited.
Realtors and their clients do not need to accept blanket exceptions and are within their rights to demand full disclosure and completion of their transactions.
At John Bethell Title, we don’t cut corners. We show all relevant CC&Rs, easements and all other recorded property rights to our customers. YOU are at the center of what we do! We will never provide or support “lite” title insurance. Call us at 812-339-8434, or send us an email at firstname.lastname@example.org to work with us!
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