Oregon City Oregon Real Estate Listings, Homes, Properties, and Lots

Title Insurance Concepts

Title insurance insures against financial loss or damage resulting from defects or failure of title to a particular piece of real estate, or from the enforcement of liens existing against it at the time of issuance of insurance.

Title: an abstract concept that describes the current ownership (“vesting”), encumbrances, and rights and restrictions carried with the property.

General purposes of a title report in a real estate transaction:

♦ Review and acceptance by buyer as required by standard PMAR sales agreement.

♦ Verification by buyer of vested owner. (Who has the right to sell it?)

♦ Review and acceptance by buyer of covenants, conditions, restrictions, and easements.

♦ Provide parties (especially escrow) a “road map” to necessary steps to provide clear title to buyer.

The title report is also known as Preliminary Commitment for Title Insurance, PTR, Prelim, or Commitment.

Title insurance (and the title report) only covers items in public record:

♦ County Tax Assessor’s Records (Tax Rolls).

♦ City Lien Records.

♦ Deed Records (County Recorder).

♦ County Circuit Court Docket.

Owner’s Policy: Title policy issued to protect the buyer (usually paid for by seller).

Mortgagee’s Policy: Title policy issued to protect lender (usually paid for by buyer).

Endorsements: Riders to the Mortgagee’s Policy that provide additional coverage that the lender may require. Almost all lenders require the following:

♦ OTIRO 209: Provides coverage against violations of conditions, restrictions, covenants and encroachments.

♦ OTIRO 59: Identifies address of insured property by street and/or mailbox number.

♦ OTIRO 208.1: Provides coverage over environmental liens filed under Federal or State statutes.

Encumbrance: An instrument attached to real property that gives someone else a financial interest or specific rights in the property, or somehow limits the property owners rights or use of the property.

Lien: Recorded or filed financial or monetary encumbrance such as a trust deed (loan), judgment, etc.

ALTA: American Land Title Association