What is
an attorney's "Opinion of Title?"
In some states
around the country, attorneys examine the recorded documents relating
to title and issue what is referred to as a "Statement of Opinion".
This statement outlines the details of the attorney's search, which
records were examined, and what encumbrances exist against the title.
The attorney's opinion of title does not insure against undisclosed
defects nor does it insure marketable title. You still need title
insurance to cover these defects.
Whereas
under a policy of title insurance you are insured for losses due to
defects in the title, subject to any exceptions stated in the policy,
under an attorney's statement of opinion, you would have to sue the
attorney if a negligent mistake was found.
Generally
you would have to prove that the negligence caused you to suffer losses.
An attorney is normally not liable if you should suffer loss due to
"hidden hazards" in the title. You should always request a
policy of title insurance if it is available in your area.
Currently
most all states offer title insurance, except the state of Iowa, which
offers a "title guarantee" policy which provides almost identical
coverage to that under a policy of title insurance.
Title insurance
is your protection against loss if any problems, such as fraud and
forgery, defective deeds, mental incompetence, confusion caused by
similar or identical names, clerical errors, or "hidden defects"
result in a claim against your title and ownership. Since the policy
premium is a one-time fee, paid at the onset of the policy, the protection
it affords could prove invaluable. Check your area for local title
companies offering title insurance and compare rates. Look for a reputable
company, one which has been in business for at least 8-10 years, and
ask about the services they provide.
If you have an attorney handling your closing, request that the attorney
obtain the title insurance coverage for you. The coverage under your
policy of title insurance will last as long as you or your heirs hold
title to the property.