- If the property is being transferred between family members through a gift or inheritance, title insurance may not be necessary as there is typically no risk of any outstanding claims or liens on the property.
- If the property is being purchased from a government entity, title insurance may not be necessary as the government typically holds clear title to the property and there is no risk of outstanding claims or liens.
- If the property is being purchased at a tax sale, title insurance may not be necessary as the property has been foreclosed upon and all outstanding claims or liens have been cleared.
- If the property is being purchased with cash and there is no mortgage involved, title insurance may not be required as there is no lender that would require it as a condition of the loan. In this case the buyer may decide to carry the risk linked to the purchase the property. There are several risks associated with not having title insurance, some of these risks include:
- Title defects: Without title insurance, the buyer will not be protected in case of any defects or issues with the title of the property, such as outstanding liens or judgments.
- Unknown parties with an interest in the property: Title insurance can help protect in case of any parties with an interest in the property, such as heirs or other claimants, that may not be known to the buyer during the purchase of the property.
- Errors in public records: Title insurance can protect against errors in public records, such as mistakes in the chain of title or incorrect legal descriptions.
- Fraud: Title insurance can provide protection against fraud, such as forged deeds or false claims of ownership.
- Costly legal fees: Without title insurance, the buyer may be responsible for any legal fees associated with resolving any issues with the title of the property.
It's important to note that even though title insurance may not be required in certain situations, it is still highly recommended in order to protect your interest and investment on the property. It is always advisable to seek legal advice before making a real estate transaction.
References:
https://mylandtrust.com/blog/how-does-title-insurance-policy-protect-you/
