Do You Need Title Insurance for a Condo?

Published On: June 6, 2022

How Does Title Insurance Protect a Condo?

No yard to maintain. Top-notch amenities. More affordable than single-family homes. What’s not to love about condo living? Condos are a great way to invest in real estate without some of the headaches of owning a detached single-family home. But do you need title insurance for a condo?

At first glance, you may think title insurance is something you can forgo when purchasing a condo. After all, with a condo, there are no property line disputes, no chance of property survey issues, and no encroachment risks. But think again – title insurance for a condo is just as important as it is for other real estate investments.
Let’s review what title insurance is, how title insurance can help protect your interests in a condo, and what is the cost of title insurance.

What is Title Insurance?

When you go through the purchase of a new home – whether it’s a single-family home or a condo, your title company will perform a title search to ensure the current owner has the right to sell you the property. The title search will look for any title defects such as lost heirs, liens, or unpaid taxes that may impede the purchase. Once the title is deemed ‘clean’ by the title company, title insurance can be issued.

Title insurance, which is issued by the title company that performed the title search, protects the insured from issues uncovered after closing. There are two types of title insurance with two different coverages – lender’s title insurance and owner’s title insurance.

Lender’s Title Insurance

When you use a bank to finance the purchase of a home, the lender will require lender’s title insurance. Their policy protects the mortgage lender and ensures they have the first lien on the house in the event of a foreclosure, unpaid property taxes, an ownership dispute, or another title issue. Lender’s title insurance protects ONLY the bank, and not you as the owner.

Owner’s Title Insurance

Owner’s title insurance, unlike lender’s title insurance, is optional, but recommended. Owner’s title insurance lasts for as long as you own the property and protects you from title defects such as unknown liens, surprise heirs, and fraud, among others.

Title Insurance and Condos

Purchasing a condo is different from buying a home in several ways. For example, when you purchase a condo, you are not buying the land the condo is on, but rather the unit itself. Because of this, property line disputes are less likely to occur, as well as other common title issues such as encroachment. Because of this reduced risk, many condo buyers opt out of owner’s title insurance.

The truth is owner’s title insurance offers protections for a condo for many other issues including gaps in the chain of title, contractor or mechanic liens for work, and tax liens, among others. Even more importantly, owner’s title insurance protects condo owners from issues specific to condo ownership.

These endorsements can include protections against a loss that comes out of non-compliance with condominium laws. For example, if the previous owner violated the condo association building code or another restricted covenant, owner’s title insurance would protect you from the financial loss associated with remedying the violation.

Cost of Title Insurance

When buying a home, the costs can add up quickly. Between the purchase price, closing costs, homeowner’s insurance, inspections, and other fees, you may be tempted to skip purchasing owner’s title insurance. Having title insurance for a condo, however, can save you thousands of dollars, even hundreds of thousands of dollars, in the long run.

Owner’s title insurance is more affordable than you may expect. The cost for purchasing title insurance is based on the purchase price of the condo. Title insurance rates are set by the Title Insurance Rating Bureau of Pennsylvania and vary. To get a general idea of what your investment would look like in Pennsylvania, a title insurance policy for a condo priced at $175,000 would be $1,597.75 with the enhanced coverage, and for one priced at $250,000, $2,068.00 with enhanced coverage.

Unlike other forms of insurance, the price is a one-time fee. This investment can not only give you peace of mind, but it can also be a lifesaver should a title issue emerge during your ownership.

Watermark Land Transfer is Your Local Title Insurance Company in York, Pa.

Buying or selling a home can be a complicated and stressful time! Let Watermark Land Transfer be your partner in your next real estate transaction. As a full-service title company, we can perform a 60-year title search on your condo and help alleviate any title issues before closing. We can also help you secure the proper title insurance policy to help protect your investment.

We work with home buyers, real estate agents and property investors in York, Pa., Lancaster, Pa., Hanover, Pa., and all of central PA. We are also licensed to assist with real estate transactions in Virginia and Maryland. Contact us today for a free quote or to answer any questions you have about title insurance for a condo or single-family home.

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The Benefits Of Choosing Watermark

Watermark Land Transfer is a real estate title company in York, PA offering title services, title insurance, closing and settlement services, and notary services. Our goal is simple - to provide our clients and our community with the resources they need for a hassle-free closing. We are more than a title company and work hard to show our clients that we are truly consumer-focused.

Our team of title agents makes it easy for homeowners to buy or sell a home in Central Pennsylvania and Northern Maryland. We offer both on-site and virtual title and settlement services and treat our clients like family. If you are in the process of selling or buying a home, reach out to us today to see how working with Watermark Land Transfer can help.

1st Watermark Benefits

We Are Vested in You

When you work with Watermark Land Transfer for your real estate transaction, we are truly vested in your success. We treat each contract, document, and closing as if it were our own.

2nd Watermark Benefits

We Keep You In the Loop

During the closing process, we will keep you informed every step of the way so there are no surprises on settlement day.

3rd Watermark Benefits

We Live Here, Too

Watermark Land Transfer is an independent, locally owned title company. We have the flexibility to get things done for you without the constraints of a national title company.