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Hello Mr. Feichthaler,
I eagerly look forward to reading your The Breeze articles each week.
My wife and I purchased our primary home in Cape Coral in 2017 with no lien and did purchase title insurance. Recently, my wife signed a Quit Claim Deed to the same home. She recently purchased another home in Cape Coral in her name.
I remain the homeowner of the original property purchased in 2017. Do I still have title insurance that was originally purchased in 2017? Should I have any concerns with the title insurance that was purchased in 2017?
Thank you so much for your time and for your response.
--John
Dear John:
Title insurance is a vital part of a real estate purchase. The one-time premium, usually paid by the seller, makes sure you are covered legally (and financially) from any possibility that your clear title is not "Clear." The policy is valid for as long the purchaser owns the property. Clearly, once the property is sold, the policy will no longer be valid. But, what kind of transfers will allow the transfer of the benefits of the title policy?
The most common way I see transfers that allow the transfer of a policy is when an owner changes title to a limited liability company. So long as the same owner of the property owns the company, the policy will typically transfer. Adding a spouse or even an heir will allow the policy to continue. In your case, you removed one owner, but an original insured on the policy (you) is still an owner of the property. Therefore, the policy you acquired in 2017 is still valid.
A few items to consider: As prices increase substantially, the limits on the policy do not. If there ever were liability, the insurer's exposure would be limited to your original purchase price of the property.
The above information is general in nature, and title insurance can be invalidated unwittingly. A quick call to an attorney before changing or transferring titles could save a lot of stress and cost.
Eric P. Feichthaler has lived in Cape Coral for over 35 years and graduated from Mariner High School in Cape Coral. After completing law school at Georgetown University in Washington, D.C., he returned to Southwest Florida to practice law and raise a family. He served as mayor of Cape Coral from 2005-2008, and continues his service to the community through the Cape Coral Caring Center, Cape Coral Museum of History, and Cape Coral Kiwanis. He has been married to his wife, Mary, for over 20 years, and they have four children together. He earned his board certification in Real Estate Law from the Florida Bar. He is AV Preeminent rated by Martindale-Hubbell for professional ethics and legal ability, and is a Supreme Court Certified Circuit Civil Mediator. He can be reached at eric@capecoralattorney.com, or 239-542-4733.
This article is general in nature and not intended as legal advice to anyone. Individuals should seek legal counsel before acting on any matter of legal rights and obligations.