Sometimes it feels like the fee’s, charges, and levies associated with purchasing property are endless. Most are unavoidable, and we have to cop them on the chin. Title insurance is optional though and is therefore worthy of careful consideration before deciding whether or not to take it out.
Title Insurance is cover designed to prevent you from incurring any out of pocket expenses (sometimes quite large ones) if there’s an issue with the title of the property you’ve purchased. There are policies for residential properties, strata properties, commercial properties, and vacant land. Title Insurance can be taken out at the moment of settlement, or anytime thereafter.
Costs for Boundary disputes often run into excess of $15,000 to rectify if a boundary realignment is required. Likewise, if council approval wasn’t granted for any building work such as an extension or renovations. The costs involved in acquiring that approval can be quite high. In cases where the structure doesn’t meet code, council approval isn’t granted. The structure then needs to be demolished at your expense.
In conveyancing circles, we often hear the story of the two neighbours who originally had a great relationship. Then, something occurred that caused them to have a falling out. Neighbour one knew that neighbour two hadn’t gained council approval for renovations he had done. So, neighbour one contacted the council and made them aware. This created much misery and frustration for neighbour two.
I guess the moral of the story is, make sure you play within the rules, or never upset your neighbour.
But the real moral of the story for everyone should be, how can you possibly be confident that you’ll never need Title Insurance? And with Title Insurance starting at just over $300 (based on property value) is it worth the gamble?
You only pay one premium at the beginning, and there are no annual renewal costs. There’s also no excess if you ever need to make a claim. If when you purchase the property, you are aware of any potential title issues, the cover limit may reduce. You’d need to discuss with the cover provider directly.
The company we recommend is ‘Stewart Title’.