Frequently Asked Questions About Title Insurance:

What is a Title?
A title is the evidence, of right, that a person has to the ownership and possession of land. It is possible that someone other than the owner has a legal right to the property. If that right can be established, this person can claim the property outright or make demands on the owner as to its use.

Do I need Title Insurance?
Title insurance is a means of protecting yourself from financial loss in the event that problems develop regarding the rights to ownership of your property. There may be hidden title defects that even the most careful title search will not reveal. In addition to protection from financial loss, title insurance pays the cost of defending against any covered claim.

What can make a Title defective?
Any number of problems that remain undisclosed after even the most meticulous search of public records can make a title defective. These hidden "defects" may be dangerous and you may not learn of them for many months or years. Yet they could force you to spend substantial sums on a legal defense, and possibly result in the loss of your property.

But the lender already requires Title Insurance, won't that protect me?
Not necessarily. There are two types of Title Insurance. Your lender likely will require that you purchase a Lender's Policy. This policy only insures that the financial institution has a valid, enforceable lien on the property up to the amount of the loan. Most lenders require this type of insurance.

An Owner's Policy on the other hand is designed to protect you from title defects that existed prior to the issue date of your policy. Title troubles, such as improper estate proceedings or pending legal action, could put your equity at serious risk. If a valid claim is filed, in addition to financial loss up to the face amount of the policy, your owner's title policy covers the full cost of any legal defense of your title.

When should I look into purchasing Title Insurance?
Call us as soon as you and the seller sign the purchase and sales contract. With a brief summary of the details, we can begin a search of the public records and issue a title commitment. Because there are a number of steps we must take to make certain that we know all we can about the title, it is a good idea to get started soon.

Do my spouse and I have a choice for how to take title of our real estate?
Absolutely.  First, we always recommend consulting an attorney regarding your specific situation.   Nevertheless, we'll try to provide a basic understanding of your choices.  You can take title as 1) Joint Tenants with the Right of Survivorship, 2) Tenants in Common, or 3) Tenants by the Entirety.  

Joint Tenants with the Right of Survivorship:  Each person owns an equal share and if one party dies, the title transfers to the survivor.

Tenants in Common:  Each person owns a share in the property. It can be equal or unequal (50%-50% or 25%-75%). If one party dies, the decedent’s interest passes to their heirs.

Tenants by the Entirety:  This is similar to joint tenancy, however, it provides more protection to a married couple. It has all the benefits of joint tenancy in that the surviving spouse takes title in the event of a death, but it includes the additional benefit of protecting the property from some creditors. In the case of non-joint debts of a husband and wife, the property may not be partitioned, sold, or encumbered without the permission of both spouses. Further, neither spouse may convey their half interest without the consent of the other. If a couple divorces in Illinois, all tenancies by the entirety are terminated and become tenancies in common.

In order to take title as Tenants by the Entirety: 1) you must be a married couple, 2) the property must be your primary personal residence, 3) both parties must agree if the tenancy is changed at a later date, and 4) specific language must be contained in the deed. Example: "John Smith and Sue Smith, husband and wife, not as tenants in common or as joint tenants, but as tenants by the entirety."

NOTE: If multiple people own a piece of real estate and the title does not state how the property is being held, in Illinois, the land is assumed to be a tenancy in common.