By WWLT
For more than 150 years, title insurance has protected property owners from title defects like undiscovered liens, fraud, forgery, and competing claims of ownership. Legislation passed in Pennsylvania in 1874 allowed for the issue of the first title insurance policies, and now, decades later, property owners still depend on these policies to protect their real estate investments.
Indeed, buying real estate is a huge investment, and protecting it is crucial. Although owner’s title insurance is not required by law, those of us in the title insurance industry know exactly what can happen when homeowners neglect to get coverage. They could be responsible for paying decades-old liens. They might have to cover the cost of fixing documents that were filed incorrectly in the past. They may even have to fight for their ownership rights in court – at their own expense – if another party would come forward with a valid claim of ownership on the same property.
While all these scenarios can be a nightmare for a homeowner, would they have the same impact on a landlord? If you have invested in rental properties, you may think that purchasing owner’s title insurance is not necessary. If that is what you believe, the team at World Wide Land Transfer, a top choice in title insurance companies in PA, has some thoughts that might change your mind.
Everyone in the title insurance industry knows how important it is to purchase your own title insurance policy in addition to the lender’s policy you paid for when getting financing. Many real estate buyers do not understand that these are separate policies, and that your lender’s title coverage does not extend to you as a homeowner. By purchasing your own policy, you can be covered for any title defects that might come up for as long as you own your property, and it can even be passed to your legal heirs in your will.
We cannot stress enough the importance of buying an owner’s title insurance policy as a homeowner, and if you are a landlord, that coverage could be even more important.
Rental properties are an investment, and as a landlord, you need to ensure your properties are generating enough revenue to cover your expenses like maintenance and mortgage payments. Owner’s title insurance coverage should absolutely be a part of that equation.
Some minor title defects, like incorrectly filed documents, might only cost a few hundred dollars to resolve, but every dollar you pay out is a dollar that is cut from your profits. It can also take time to resolve even minor title defects, which busy landlords usually can’t afford. When you work with a full-service title insurance company like World Wide Land Transfer, we can usually resolve minor title defects with very little input from you. Once the defect is discovered, we can resolve it for you so you can focus on maintaining your rental properties.
Of course, more serious title defects can present an even bigger risk to your operation. Say a neighboring property owner would conduct a survey, discovering that some structures on your property are actually located across the property line. As the property owner, you would be responsible for relocating or demolishing the offending structures.
Or imagine that the descendant of a previous owner would come forward with a previously undiscovered will that names them as the rightful owner of your property. Resolving this issue will require you to hire a lawyer and spend time in court defending your ownership rights. If you aren’t successful, you could lose ownership of the property, cutting off a major source of income for you.
Either of these cases could cost you thousands of dollars and countless hours, and the potential loss of a rental property should be alarming to any landlord. The good news is that with the right title insurance policy, you can be protected from both of these scenarios and many more. A standard policy will provide coverage for some or all of the court costs associated with defending against a competing claim of ownership. With the right endorsements on your policy, you could also have the costs of resolving a boundary dispute covered. These and many other title defects can be covered by your policy, and speaking to a title insurance agent is the first step to getting that coverage.
If you’re like many landlords, you may own more than one rental property. That means more risk—and more potential for hidden title defects to slip through the cracks. Every new property you add to your portfolio introduces another opportunity for a lien to go undiscovered, a deed to be misfiled, or an old claim to resurface. Without owner’s title insurance in place for each property, you’re leaving your investments vulnerable. The larger your portfolio, the greater the risk, and the more you have to lose if something goes wrong. Title insurance is a simple, cost-effective way to protect what you’ve worked hard to build.
There may come a time when you decide to refinance your loan or sell one of your rental properties. If there are unresolved title issues at that time, they could delay or even derail the process. Title defects must be cleared before closing, and doing so on short notice can be both stressful and expensive. Having owner’s title insurance in place ahead of time ensures that any issues will be identified and addressed when you purchase the property—not when you’re ready to sell. That peace of mind can be invaluable when timing matters most.
Owner’s title insurance doesn’t just protect you during your ownership—it can also benefit your heirs. If you plan to leave your rental properties to family members, an owner’s policy can be passed along, ensuring they’re covered from the moment they inherit. Without it, your loved ones could be forced to deal with legal complications, delays, and financial burdens tied to title defects. For landlords looking to preserve generational wealth, title insurance is a smart and forward-thinking investment.
Get in touch with World Wide Land Transfer to find out more about the policies and endorsements that are available to you and how they can protect you. We can provide title insurance in New Jersey and other areas.
World Wide Land Transfer is a service-oriented PA title company with offices in Philadelphia, New York, and Washington, D.C. With a record of going above and beyond, we are trusted to close everything from complex commercial transactions to residential refinance and purchase transactions.
