Our office always recommends Owner's Extended Coverage (OEC) to all our Buyers and Sellers but why?
OEC is extra insurance that covers several things:
(1) Parties in Possession
(2) Unrecorded Easements
(3) Survey Matters
(4) Unrecorded Mechanics' Liens
(5) Gap Period (which is the period between the Effective Date/Time of the Commitment to the Date/Time the Deed is recorded)
(6) Unpaid Taxes, Assessments and Unredeemed Tax Sales prior to the year of Closing
While all six are important, perhaps some believe the most important are numbers 4 and 6. Why? Because those two are sometimes misfiled. Title companies are responsible to find any liens or past due taxes on any property before they Close on it and they do a fantastic job! However, they can't find something that has not been filed on the correct property and mistakes happen. And, once the error is found (usually when that parcel is sold), the lien is placed on the right property and whoever owns it now is responsible for it. Sure, the new owner can try to get it from the whoever owed it but there is no guarantee and who knows what can happen next. Will one have to sue in court? Hire an attorney? What if the person who owned was 3 or 4 owners ago? Are they even still around to be held responsible? What a pain not to mention could be quite expensive!
If the Seller or Buyer purchased OEC, which currently only costs $65, all one would have to do is contact Title, give them a copy of the whatever they've received, and Title immediately pays off the lien or past due taxes (including penalty's, fines, interest) and Title goes after whoever owed it (they have a team of attorneys that specialize in protecting their interests). Even if that owner was 4 or 5 owners ago or more.
Still have questions about Owner's Extended Coverage (or anything else related to real estate)? Please give one of our Agents a call and we will be happy to help!
DISCLAIMER: Timber Wolf Realty nor it's Agents are attorneys and are not giving legal advice. We always recommend seeking legal and/or other counsel prior to making any decisions relating to matters of real estate, legal, tax, or any other matter.