HARConnect

Title Insurance in International Transactions

By Mitch Creekmore, CIPS

Since man first began claiming and acquiring ownership of land, there has never been a time when he has not needed some form of title insurance. The very nature of land induces a need for title assurance because its characteristics differ from other forms of property. Land titles are symbolic because the deed is what a purchaser gets when he buys real estate rather than actual delivery of the property. For this reason, it is highly important that a purchaser have the best assurance possible that his title is good, unencumbered and free of flaws, or that he have an indemnity against loss due to a defect in title.

Historically, a buyer’s lack of knowledge concerning the complexities of land titles have caused him to discount the importance of land title assurance. Knowing little or nothing about titles, real estate buyers have consistently relied on the advice of others. They have been led to believe that it is not necessary to look back into a title chain beyond a couple of previous ownerships, that the public records contain information with respect to every possible title hazard and that an attorney’s opinion gives proof positive of a good title. Conditioned as the public has become through traditions and practices, it is inconceivable that a title could be completely lost irrespective of the customary assurances available. Prior to the inception of title insurance, it became obvious in the late 1800s that the U.S. needed a more secure form of title assurance – a form based upon indemnity dollars instead of word of mouth reliability. And still today, over 130 years later, foreign purchasers of real estate around the world face the same dilemma.

People have always been slow to alter practices or abandon customary ways of doing things. Mores of the public have always been difficult to change whether in the United States or in other countries around the world. Title insurance, however, is the latest step in the evolutionary development of title assurance on international land. It displaces reliance upon the infallibility of individuals and substitutes corporate indemnity providing the most secure form of title assurance yet devised. After more than 130 years of developing an integral role in real estate transactions in the United States, international title insurance is becoming a standard with the issuance of a title policy that can be enforceable under U.S. jurisdiction.

Overcoming public perception in any country on its importance and subsequent benefit when purchasing properties or securitizing mortgages with real estate has not been easy, but it is becoming more of an international standard. At the end of the day, a title insurance policy is still the only guarantee that any purchaser can acquire protecting their rights of ownership and monetary investment in the realty they buy… anywhere in the world!

Mitch Creekmore, CIPS is Senior Vice President of  Stewart Title Guaranty Co.

Lori Carper

Lori Carper

Director of HAR Meetings & Events and HAR International

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