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How long does title insurance policy last?

February 2, 2006

Longtime homeowners worry about 1972 purchase

By Robert J. Bruss
Inman News

DEAR BOB: When my wife and I bought our home in 1972 we obtained an owner's title insurance policy from First American Title Insurance Co. We kept the policy in our "little drawer" in the desk, where we keep other valuables including our deed, wills, insurance policies, photos, etc. Has this title insurance policy expired? How long should we keep that policy? --Erwin H.

DEAR ERWIN: The answer to your question is: owner's title insurance policies are in effect as long as the property buyer or the heirs own the property. Your policy is still valid in case an insured title problem arises. Keep that policy as long as you own the property. It will even protect your heirs from title risks.

Just a few days ago I received an e-mail from a home owner who was having a title problem. I suggested she contact her title insurer. Unfortunately, she couldn't find her deed, title insurance, or any other evidence she owns the property. She couldn't even remember what title company insured her title.

Interestingly, many title insurance companies have merged with other title insurers. Fortunately, your title policy from First American Title Insurance Co. is with one of the oldest and best title insurers. But home owners with title policies from insurers that are no longer around should contact their state insurance commissioner to determine what title insurer took over the defunct title insurer's obligations.

WHY TENANT CAN'T OBTAIN TITLE BY ADVERSE POSSESSION

DEAR BOB: Years ago, I leased a vacant building with the owner's written agreement that I would pay all the expenses, such as property taxes, fire insurance, repairs, etc. There was no mortgage, as far as I know. I have been paying the costs for at least 25 years, but I make no actual rent payment to the property owner, who I understand is now deceased for at least 10 years. Nobody bothers me and I operate my busy motorcycle repair business very happily with the help of three grossly overpaid "bikers." A few years ago, I put on a new roof at my expense. Other than that, my expenses have been far less than rent would be. But recently the city has been "bugging" me in a nice way about bringing the building up to code. It would cost at least $20,000. You had a recent item that said when a person pays the property taxes on another person's property for a number of years, and occupies that property, he could acquire title by adverse possession. Would that apply in my situation? --Otto W.

DEAR OTTO: You have a very unique story. The major reason why you probably are not entitled to title by adverse possession is that you entered into possession as a tenant. Adverse possession requires "open, notorious, and hostile use," plus payment of property taxes, for the required number of years. That rule clearly disqualifies tenants.

Your legal problem is that your use is not "hostile." It was originally permissive. However, if you are sure the owner died about 10 years ago, your use might have become hostile as to his heirs.

Please consult a local real estate attorney to discuss your situation. The legal solution could be to bring a quiet title lawsuit to determine who now owns the property you occupy.

Copyright 2006 Innam News



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