A title insurance policy provides coverage in the event that the there is a financial loss due to flaws in the grantor's legal title.
TYPES
Lender's Policy: insures the mortgage lender's interest in the title to the property (the collateral for their loan).. Most lender's require this type of policy and charge the cost to the borrower at the loan closing.
Owner's Policy: Insures the owner's interest in the property. The premium for this policy is usually small if a lender's policy is also being purchased.
TITLE INSURANCE AGENTS
Many lawyers (especially those that represent lenders in loan closings) are agents for title insurance companies and can arrange for coverage. There are also any number of independent title insurance agents that are not affiliated with law firms.
Typically the title insurance agent will also act as the closing agent for the purchase of the property
TITLE INSURANCE "COMMITMENT"
The commitment is not the actual insurance policy. The policy is issued after the deed or mortgage is recorded.
The commitment is an offer to issue a policy of title insurance subject to the stated terms, conditions and exceptions.
The commitment lists the title flaws that the policy will not cover ("exceptions") and the issues that must be resolved prior to the issuance of the policy ("conditions"). In the standard title policy usually issued in Florida, these conditions and exceptions are listed in Schedules B1 and B2 of the commitment.
"Schedule B1": Lists that standard exceptions (title flaws that are not being insured against). Typically these include things such as taxes for the current year, easements of record, restrictions shown on a plat map, etc. Schedule B1 exceptions do no t have to be cleared up prior to closing.
"Schedule B2": Lists conditions that must be satisfied prior to the issuance of the policy. Typically will include things such as clearing up a prior owner's judgment liens, mortgages, etc.
The title company is not responsible for omitting a lien or encumbrance in a commitment unless its offer to issue a policy of title insurance is accepted, the premium is paid, and the title insurance policy is issued.
2. DEEDS
The only way that "title" to real estate can be transferred (other than through the probate process) is by "deed". The requirements of for deeds are spelled out in Florida Statutes.
TYPES OF DEEDS:
Quitclaim Deeds: conveys whatever title (if any) held by the grantor. The grantor makes no warranties (i.e. promises) about his or her ownership in the property.
Warranty Deeds: The deed contains warranties (or promises) that the grantor has title. Grantor can be sued by the grantee if the title turns out not to be good.
FORMALITIES OF DEED EXECUTION - A deed or mortgage must have been executed with certain formalities in order for it to be recorded. Florida requires the following formalities:
signing
"attesting" (two witnesses to the grantor's signing must sign the deed or mortgage in order to assure authenticity)
acknowledgment (attestation by a notary public or other public officer)