People purchasing property in NSW must always remember that the principle of Caveat Emptor applies – Buyer Beware! Title insurance is a form of insurance available to all property buyers.
When purchasing a property, every effort should be made to ensure that the property is what it seems.
Getting a Building Certificate will verify the structures on the land and an identification survey will show where the improvements on the property are situated in relation to the boundaries. However, if a Vendor does not have a Building Certificate and Survey, getting your hands on these documents can be a slow process particularly with settlement fast approaching.
Title Insurance acts as an additional tool for buyers to safeguard themselves from an existing problem that is not apparent on your preliminary inspection. The cover is provided for a broad range of risks like:
Fraud, forgery and identity theft;
Illegal building work;
Survey/boundary defects; and
Planning and title defects.
An example of where Title Insurance could have saved one of our clients (had the situation been a lot worse) was only discovered when they went to renovate. When Council came out to inspect the property they discovered that the previous owner did not comply with their Council approval. While in this case it was not a major problem to rectify the approval, but had Council decided to issue a demolition order for the non-approved structure, our client would have had to bear the cost of fixing the problem. It is in circumstances like this that Title Insurance would have saved our client.
Whilst we recommend you get a survey and building certificates for the property as part of your due diligence, sometimes it is just not possible to get these documents in time and the cost of a once off premium for the policy can be worth its weight in gold.
Therefore Title Insurance is a clever risk management decision if you are buying a property. If you need advice about buying property, click here to contact us today.