How Important is Owner’s Title Insurance?

THE FOLLOWING ARTICLE IS A REPRINT FROM OCTOBER 22, 2011 IN THE LOWELL SUN written by Attorney James Haroutunian (Billerica MA).  With the spring market already off and running and with so many foreclosures out there, this is a reminder to ALL buyers to consider purchasing owner’s title insurance as par t of the closing process on your new home. 


A new chapter unfolds in the foreclosure saga

This week, the commonwealth’s highest court substantiated the long-term negative effect of a defective foreclosure on subsequent owners.


Last year, the infamous Ibanez-case ruling identified why foreclosures can be defective if a lender forecloses without proper documentation proving its ownership at the time. This week, the Supreme Judicial Court applied that ruling against a subsequent buyer of a defectively foreclosed property. The ruling effectively stated the new owner’s title is null and void, despite his paying for and improving the property.


These are amazing times in property-law history. The Bevilacqua case sets a new precedent for owners seeking proper channels to prove their title through Massachusetts Land Court. Yes, there is a Land Court, which deals primarily with land legal issues.


One method the Land Court offers is a lawsuit to “try title.” This action is brought against known or unknown potential adversary parties who may claim to own your land.


The tool provides everyone in the world an opportunity to step forward and fight for a claim to your title. Most cases result in default plaintiff victories, when nobody appears to challenge ownership. However, plaintiffs must first prove they own the property.


In Bevilacqua, the court ruled the plaintiff had no standing to file the case (i.e., no ownership of the property he paid for), due to a defective foreclosure in its title history. This new case proves a practical effect to the Ibanez ruling. Other big cases are in the court’s pipeline, which will hopefully soon direct the method by which Bevilacqua can clear the title to his property.


In the meantime, remember to buy owner’s title insurance when you purchase (or maybe even when you refinance). Take advantage of the protection title insurance provides.



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