DC TITLE INSURANCE

What is a DC Title Insurance Policy?

What is a DC Title Insurance Policy?

A DC title insurance policy is a contract of indemnity that promises to pay for a loss up to the face amount of the policy if the state of the title is different than ¡t is set out in the policy and if the insured suffers a loss as a result of the difference. Your title company’s policy insurance is guaranteed by its underwriter.
A title company will research the property ownership, including liens and encumbrances, property taxes, chain of title, unreleased deeds of trust, association fees (if applicable) and utility bills as required by local laws. The title company may also order property surveys for single family homes. The title company issues title insurance guaranteed by an underwriter and provides evidence of ownership (title) to the new property owner. This title will be designated as ‘Marketable’ or ‘Insurable.’ Marketable title is common to the majority of real estate transactions. Also known as ‘clean title,’ it provides that the property is free of outstanding liens, issues or encumbrances. Insurable title provides that there may be a ‘cloud’ on title due to an unreleased deed or lien or an issue related to a deed, unpaid fees or fines,  etc. Buyers of distressed properties such as foreclosures and REOs are frequently issued ‘insurable’ title.
The tile company and its underwriter assess the related risk and it is their choice whether or not to assume it. It is also the buyer’s choice as to whether or not they wish to accept ‘insurable’ title as this may lead to issues when they want to resell or refinance the property. The longer issues are left unresolved, the harder they are to clear.

What Does a DC Title Insurance Policy Cover?

  • A DC title insurance policy should cover claims arising out of title “clouds” that could have been discovered in the public records and “non-record defects” not discovered in records after a complete search. The policy should protect the insured for as long as they, their heirs and devisees, hold title to the property;
  • Purchasers of real estate can risk of serious financial loss due to title defects. Due to the many rights, claims, interests and encumbrances that US law recognizes in real property, ¡t’s important for the buyer to have a title search and examination performed before settlement in order to identify the nature of the title the seller can legally convey, along with the rights and interests of all other parties relating to that particular piece of property;
  • Title policies offer protection available against latent defects of title which do not appear of record such as forgery, impersonation, capacity of parties, faulty acknowledgments and mechanic’s and mechanics liens.

Lender and Owner Policies

Your lender will require DC title insurance to cover the lender against the things mentioned above. This is called the Lender’s Policy. Policy issuers feel buyers should have title insurance for the same reasons. This type of coverage is called the Owner’s Policy. Owner’s policies are optional for buyers. Contact your title company for an explanation of this coverage, its term and cost.

What is a Preliminary Title Report?

Your title company will issue a Preliminary Title Report, which is a disclosure of title conditions and property information used to secure your title insurance policy through its underwriter. Included  will be the vesting (way in which title is held) and identity of the current owners, liens and judgments of  record, details of the property, including its legal description, along with easements and encroachments and other exceptions, if any exist. Home buyers should make sure the legal description of the property matches that of the MRIS listing information and the information contained in the purchase contract. The legal description consists of the Lot (land parcel), Block, Square and, depending on the property type and location, subdivision, and/or condominium unit number CC&Rs (Covenants, Conditions and Restrictions), common area interests and conveyances. For single family homes and vacant land, the description will also include the property’s boundaries, tract, historic district and/or property designation and restrictions, if any, and a survey map detailing the lot boundaries and dimensions. You can look up the property’s square and lot on the D.C. Office of Tax and Revenue’s Real Property Tax Database by searching its address. Additional information in the database includes current owner, assessed value, and physical description. An alternative is to search the D.C. Atlas from the Office of Planning. Your Preliminary Title Report will also address property taxes, which are listed as liens. Property taxes must be current at or prior to transfer, so any outstanding property taxes are prorated and paid through title at settlement. Other primary liens are mortgages, current and prior (unreleased) deeds of trust. Your title company should obtain releases for all unreleased DOTs rather than simply providing exceptions. This will assure you of a clean chain of title.  

More District of Columbia Resources

Conduct Plat Map Research Historic real estate atlases, or “plat” maps, show the footprints of each building extant in the city at the time the atlas was published. The Washingtoniana Map Collection includes atlases published by Hopkins (1877-1890s) and Baist (1903-67). Some early Baist atlases (1903-1919) have been digitized by the Library of Congress and are available online. Atlases are arranged by volume for different parts of the city. Plat maps convey basic information about a property such as lot dimensions, building dimensions and material. These maps also can help you note old lot numbers, old street names, and old subdivision names. Studying maps over time gives a sense of the gradual development of the neighborhood surrounding your home, and shows what existed before your home was built. You can also look for changes to the shape of the footprint to investigate alterations made to the home.
Find Original Permit to Build Washingtoniana has microfilm of building permits from the National Archives collection, all permits issued from 1877-1949. The most important permit to find is the “Permit to Build,” and the best way to find that permit is to search the Building Permits Database (now available online at HistoryQuest DC). The database includes most of the information from the original permit, including date of construction, architect, builder, owner, materials, dimensions, cost and use of the building. Permits issued after 1949 are available at the D.C. Archives. You may also choose to look at the permit as it was originally issued, by consulting the building permits on microfilm. The original permit may include additional information not found in the database, such as plat drawings or inspector reports. If the permit has the note “plans on file,” the plans for the property are available at National Archives in College Park.
Find other Permits There may be other permits associated with a property in addition to the Permit to Build, such as permits to renovate, to build an addition or a garage, to add additional stories or a new facade, etc. These permits must be accessed using the microfilm indexes: By Square Number 1877-1928 By Subdivision 1877-1908 (for property in Washington County — above Boundary St./Florida Ave. — east of Anacostia River; consult plat maps for subdivision names) By Street Address 1928-1958
Research Ownership The Recorder of Deeds has a database that traces transfers in ownership of a property from 1921 to the present. [Site requires you to create a free account or login and accept terms as a guest.] Other resources for researching ownership are the Washington Board of Realtors Transaction Fiche (1920s – 1980s) and the Assessment Directories (1886-present). All of the above are organized by square and lot.

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