Becoming the vested owner in the chain of title often isn’t enough to protect you from unexpected legal and financial obligations. An unforeseen cloud in your chain of title could mean that you’re financially responsible for pre-existing liens on the property—especially when purchasing sheriff’s sales, tax deed sales, or any property that is sold for delinquent taxes. The only way to guarantee protection from future claims against your interest in the chain of title is by obtaining title insurance.
When you purchase a property from a county auction for delinquent taxes, you could be inheriting a lot more than just the property. Tax deed or lien sales and sheriff’s sales often come about after the property owner fails to pay their property taxes. Auctioning these properties allows local governments to collect outstanding debts from new property owners. However, the simple purchase of a property doesn’t necessarily eliminate all of the debts and it’s your responsibility to thoroughly research the property’s chain of title before purchasing to avoid inheriting unwanted debt.
Obtaining title insurance protects you from unexpected claims to your ownership interest in the chain of title, whether that’s in the form of legal or financial obligations. While most insurances are bought to preemptively prepare for potential disasters, title insurance is bought to take care of issues that have already happened in order to protect you from being liable. With title insurance: To insure the future, you must have a clear past. In order to get title insurance for your property, you need to have a clear chain of title, which may require you to file an action to quiet title if you obtained the property through a delinquent tax sale. Alternatively, you can obtain our Due Process Certification to ensure that the tax sale foreclosure due process is complete and accurate. This will prove that you or a title insurance underwriter will not be at risk from an affected party of interest challenging the tax sale, allowing you to get title insurance for your property.
Getting title insurance for your property should be the first step you take after purchasing. While in most cases obtaining such insurance is not required by law, it is strongly suggested in order to keep your assets protected for the long term. If you’re taking out a loan to purchase your home, the lender will require you to obtain lender’s title insurance. However, if you buy the property outright, title insurance is not required but you can buy an owner’s title policy to protect your investment.
Purchasing title insurance is a great way to protect yourself from inheriting someone else’s problems, and it’s highly recommended that property owners obtain such insurance—especially when making a purchase through a county tax deed or lien sale.
Tax Title Services offers a fast, convenient, inexpensive way for real estate investors to obtain title insurance after purchasing at county auctions. Through our Due Process Certification, tax title services verifies that all due process and statutory requirements were met accurately. This step verifies that your interest in the chain of title is secure. Once certified, we’ll partner you with a title insurance agent to get the coverage you need.