Does Title Insurance Cover Property Encroachment?

Title insurance protects homebuyers nationwide. It is a vital component in the home buying process. Ocassionly, issues come up during the title search, such as property, but that doesn’t mean you can’t buy the home or qualify for title insurance. Depending on the circumstances and often property encroachments are minor – both buyers and sellers can agree on a final contract.

National title insurance company exists to protect a homeowner’s legal rights to the property. It also acts as a financial safeguard in case issues come up in the future regarding ownership. Another type of title insurance is the Lender’s Policy, which protects the interests of the financial institution involved in the transaction.

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In this article, we will discuss does title insurance cover property encroachment or not in great detail.

Basic Parameters

When you work with an experienced title company, they will provide national default title services to uncover things such as existing liens, discovering wills and property encroachment. If a property encroachment is discovered, this is typically placed, this is placed in the exceptional section in the forms distributed by the Land Associations as long as the encroachment doesn’t render the property unmarketable. If the title is marketable than title insurance can typically be bought.

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On the Contract and finalizing the deal

There are many variables to consider when purchasing a home:  location, price, architecture, size of the property etc. If there are property enforcement, then small encroachments aren’t ever an issue or don’t cost much to repair. Property encroachment can sometimes be offset by getting a reduction in the property’s purchase price. If the details can be agreed upon, the sale can still be a win/win situation for the buyer and seller.  

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A reputable title insurance company will conduct a thorough title search to find out if there is any issue related to the property in public records. When this is completed, the documentation for the policy can be written up and you can prepare for closing. Check out here to learn everything before buying title insurance in great detail.