Today, every family dreams of their own housing. The real estate market is so diverse that it remains only to collect the necessary amount of money and buy the apartment of your dreams. The main problem that most citizens face when buying real estate is related to an “unclean” story. Moreover, the whole difficulty lies in the fact that it is impossible to verify the legitimacy of the transaction on its own, without the help of qualified lawyers. The only way out in this situation is title insurance.
general information
In order not to become a victim of scammers when buying a living space, you need to have at least some idea of the current legislation. This is especially true for title insurance, because today a lot of black realtors have appeared on the real estate market who earn from illegal manipulations with real estate.
The essence of this insurance is that it protects property buyers from all previous transactions that have been made with it. For example, if an apartment was sold without the consent of one of the spouses, then the transaction is illegal, and therefore, the purchase of such real estate can lead to loss of money.
Title insurance may include:
- living space;
- commercial real estate;
- land;
- rental right.
Absolutely any property that is owned by the insured can be insured, but it can also be challenged by third parties. However, in most cases property title insurance is used when buying apartments, private houses or commercial buildings. An insured event is the loss of real estate due to previous transactions completed illegally.
A bit of history
For the first time in legal practice, the term “title insurance” appeared in 1997, after the introduction of a law regulating the rights of citizens to own real estate, as well as the procedure for conducting transactions with it. This insurance product became in demand in 2015, when the “black” real estate broke its peak.
According to lawyers, title insurance in our country is at the formation stage, however, with every year the demand for it among the population will certainly grow. Moreover, many banks force their customers to purchase this service in order to protect customers from fraudsters and reduce their own risks when issuing a mortgage.
Real Estate Market Challenges
To date, the housing issue is one of the most relevant for a huge number of Russians. Most citizens prefer to solve this problem exclusively by legal means, but there are those who are willing to deceive. The latter are precisely the culprits of the fact that conscious citizens who have not violated laws in their entire lives face a lot of problems when buying an apartment.
The most dangerous thing these days is to buy housing in the secondary market. This is due to the fact that with many apartments more than one transaction was made. Many schemes are known with which you can crank up the illegal sale of living space. According to statistics, about 2 percent of all transactions with real estate are illegal. Based on the unfavorable situation that has developed in the market of not only secondary, but also primary real estate, title insurance is the only insurance that allows you to save money if buying an apartment is illegal.
Title loss insurance: how it looks in practice
The process of obtaining this type of insurance begins with an examination, during which banking lawyers carefully study the history of transactions with a particular object with a view to identifying fraudulent activities. If it comes to living space, then the check takes from a few days to a week, and in the case of commercial real estate - about 3 weeks. In the process of researching a property, not only documents provided by its owner are taken into account, but also data obtained at various instances.
If during the procedure no violations are revealed, the insurance company proceeds to the next stage of title insurance, namely, the determination of the tariff. The tariff for property insurance is one of the highest and can range from 0.2 to 4.5 percent of the total.
If the proposed conditions suit the client, then the IC proceeds to legalize the transaction. Employees of the company draw up a title insurance contract, which details all the terms of the transaction. It is important to make sure that in the contract the specified amount of insurance payment is equal to the market value of the apartment you plan to purchase.
What documents will an insurer need to conduct an examination?
In order for the insurance company to be able to carry out an objective examination, you will need to provide it with the following package of documents:
- document certifying ownership of real estate;
- purchase / sale, transfer, gift or equity agreement;
- certificate of inheritance;
- privatization agreement;
- copies of identification documents of the seller, representatives of the insurance company, as well as authorized representatives of the bank, if the property was registered in a mortgage;
- technical documentation for an apartment or house;
- extract from the house book;
- a document informing the seller of all persons included in shared ownership of intent to sell real estate;
- permission of the trustees to buy / sell;
- a notarized document certifying the consent of other family members to the sale;
- valuation report.
The listed documents are mandatory for title insurance in case of purchase and sale of an apartment.
If the transaction is conducted with a private house or land, then additionally required:
- document certifying ownership of land;
- site plan;
- act on the assessment of the structure and the plot.
With regard to registration of real estate insurance by legal entities, the list of required documents is different, and it is better to check with your insurance company.
Title insurance services
Every person planning a home purchase is interested in the question of how much title insurance will cost him. Sberbank is one of the largest banks in Russia, which offers the lowest tariffs for services in this direction.
In the process of calculating the cost of insurance, the following factors are taken into account:
- real estate market - secondary or primary;
- insurance period;
- market value of living space;
- level of risk.
It is worth noting that the cost of insurance can range from 0.2 to 3.0 percent of the estimated value of real estate. It is important to understand: the more transactions were made with the object, the higher the likelihood that he participated in illegal manipulations, therefore, the insurer's associated risks are higher.
What documents will be required for registration?
So, you have decided to use the title insurance service.
Documents for this will require the following:
- documents of the seller of real estate;
- document proving ownership of the living space;
- contract of sale;
- certificate of appraisal work;
- registration certificate for housing;
- extract from the house book.
If you plan to buy a private house or land and want to insure yourself against illegal transactions with them, then in addition to the above papers, you will also need to provide a document proving your rights to the land and a plan with a cadastral number.
Ingosstrakh
Title insurance when buying an apartment offers quite a lot of companies operating in the Russian real estate market. However, most consumers choose Ingosstrakh Insurance Company. This organization provides insurance services not only when buying a home for cash, but also when applying for a loan. What is mortgage title insurance and how does it work?
When arranging insurance, Ingosstrakh incurs obligations to pay off all loan debt to the bank, if during the process of using real estate it is discovered that any fraudulent actions were previously performed with it. In addition, if the apartment will be repaired, the insurer allows an increase in the maximum amount of insurance payments.
Additional real estate insurance services from Ingosstrakh
In addition to the main risks faced by a large number of real estate buyers, the insurer offers to protect itself from:
- threats to disrupt the transaction;
- violation of the legal rights of persons under the age of majority;
- illegal transaction with a person with limited physical abilities;
- violation of applicable law when making a purchase / sale transaction.
Thus, IC offers the most comprehensive range of real estate insurance services, so everyone can protect themselves from any risks.
What to do in case of an insured event?
An insured event is a situation in which the policyholder is deprived of ownership of the living space for the reason prescribed in the insurance contract. The occurrence of an insured event occurs after the court accepts the claim filed by a third party.
You should begin to take action immediately after you receive notification of the start of a trial or other proceeding. First of all, you should contact the insurance company and notify her about the problem. Further, representatives of the UK will begin to take all necessary actions and will represent your interests in court. This scenario is possible only when you have provided relevant information when signing the insurance contract. Otherwise, the contract may be invalidated by the insurer and you will be denied the payment of monetary compensation.
Conclusion
To issue title insurance or not - everyone decides for himself. However, as practice shows, there is a sense in such actions, since every year the number of “black” realtors increases, and the methods for manipulating them are becoming more sophisticated. Therefore, it is better not to risk your money, especially since the cost of real estate is quite high.