Do I need title insurance when purchasing a condominium?

Yes, when purchasing a condominium you should consider buying an owners title insurance policy.

An owner's policy will provide you with protection against defects in your title for as long as you own the property (for a one-time premium).

Title insurance provides coverage against many defects in "title'. These risks include:

• Unpaid taxes or liens
• Impersonation or forgery by a previous seller
• Errors in the recording of title documents

Policies for title insurance are issued as both "lenders' and "owners' policies.

An "owners" policy protects your interest as owner while a "lenders' policy covers only the lender's interest in the property for the time-span of the loan. When title problems occur, significant financial loss takes place. You might be forced to hire a lawyer in order to defend your interest in the property. You might even lose the use of the property and your equity in it while still paying a balance of the note.

The insurance company would be required to defend your rights to the property in court only if an owner's policy is purchased. The American Land Title Association (ALTA) approves title policies that are frequently issued as standardized issues. A condominium endorsement covers title issues unique to condominiums. This includes defects in documentation and unpaid fees. Contact your insurance agent for further details regarding title insurance. Title insurance is important when purchasing a condominium, so make sure that you shop around and find a good deal.