Why Title Insurance is Needed - Even on New Construction
It is easy to assume that if no one has owned a home before, there is no risk of someone challenging your property rights to that home. However, the land the home is built on has been owned previously and there are several other ways that your ownership rights could be challenged as well. Without an owner’s title insurance policy, a new homeowner could face defending their rights to ownership all by themselves. As your trusted title company at the Lake of the Ozarks, we wanted to share some things for you to consider.
If a property was inherited by multiple siblings, and that property was sold to the developer without the knowledge of one of the siblings (or their heirs), the new construction may be sitting on land the current homeowner doesn’t have clear title to. This can be true even if that developer has owned the land for years.
Property lines and easements.
If the land was not properly subdivided or your home is not correctly described on the right lot in the subdivision, there could be issues regarding ownership come up later. At the Lake of the Ozarks, it is not uncommon to find that where roads and driveways and lots are divided do not match the original plat on paper. It is also possible that there is an easement the buyers don’t know about that allows for sewer lines to be run right where they planned on building a pool. Knowing that the property you are buying and building on is accurately recorded and knowing the easements attached to the property are absolutely essential to your ownership rights.
What if a mistake is made during a high-volume building market and an application is approved for a project or build that does not actually meet code or local building requirement? Those requirements can (even years) later be enforced … there are cases in other states where that has meant literally having to lower the roof on a finished home to satisfy those restrictions. While that is bad enough for the homeowners, without title insurance they could be stuck paying for the costs as well.
The developer involved in your new build will have a responsibility to pay off contractors or subcontractors involved in the build. If the buyers are working with a contractor, the contractor also must pay his subcontractors. If any one in the process is not paid, they may have a right to file a mechanic’s lien on the property. That means the new homeowners could be facing foreclosure (or paying for building costs more than once) even if they have made their mortgage payments and the contractor has been paid.
At Arrowhead Title, we know how to protect homeowners from scenarios like these. We are so excited for everyone who is ready to take on the dream of building a new home at the Lake of the Ozarks. When you are ready to a lake home, rely on a title company at the Lake of the Ozarks that knows how much ACCURACY and INTEGRITY really matter. At Arrowhead Title Company in Lake Ozark, we are all about minimizing your risk and maximizing your investment.