NSW title insurance - what is this?

[Zorrohd]

Hello forum members,

I've only recently joined, and am finding this form hugely interesting and often entertaining, so many people with so much experience. I'm hoping some of you might be able to help me out with a query.

My partner and I live in Victoria, and have a couple of IP's in our home town of Wangaratta.

Last weekend we bought a property in Albury, and this afternoon travelled up there to sign the contract with our conveyancer. She suggested we take out 'Title Insurance' which she explained as being a once only charge of $350 to cover us if there are some legal problems with the property title that she has not been able to uncover in her investigations. Apparently the selling process in NSW is a lot different to in Vic where there is a large onus on the vendor to supply correct details of the property and to prove for example that all buildings on the property have been done with a permit.

I'm just a bit wary that this might be a waste of money - similar to an 'extended warranty' that may be offered on consumer goods?

Any feedback would be be greatly appreciated, and many thanks in advance.

 

[Jake Milne]

Title insurance just covers you in the case of your solicitor missing anything like an easement or a defect in the title.

It's rare one encounters problems that can't be avoided with a thorough review of the contract but sometimes there are issues which may result in financial loss.

I know of one investor who tried to buy an old Quest apartment but the contract and title was defected, something to do with not being able to transfer the ownership of the title, so they ended up paying a couple hundred thousand to buy and ended up with ...nothing.

 

[DaveM]

A pro of title insurance through Stewart AU etc is coverage against unapproved buildings or extensions. If it was unapproved and you were not aware of the fact and council requires it to me modified/demolished they will pay out the costs associated with much of the work

 

[Zorrohd]

Hi Jake and Dave, thanks for your replies - it sounds like cheap insurance for a lot of peace of mind. Expenses like that quest apartment would put a huge hole in an investment budget - if not skittle it altogether and more.

The buildings on the block (house and garage) both have council approval, but I have to say I was surprised that the council still use an old fashioned card system to keep track of these things. Seems a bit easy to lose, and of a card went missing, what could prove there was council approval in the first place?

Yep, I reckon we will spend the $350 on title insurance. Thanks again.