Do I Get Title Insurance on a Condominium?
In a condominium, you technically do not own “land” but rather you own the “air space” inside the walls, ceiling and floor of your unit. Title insurance is available for a condominium, just as it is in a house on it’s own parcel of land. You should get title insurance on your condominium unit to protect your interests.
A title search will be done when you are purchasing your condominium, just as it is when buying a house, and this search will reveal any defects in the title of the unit along with any problems or liens which may occur against the condominium building or the complex itself. You will receive a deed to your own unit plus an undivided interest in the common areas, such as the parking areas, walkways, yards, and pool.
Read over the title report carefully. You would want to be sure that you could not be held liable for any unpaid bills or liens against the condominium association. If there are unpaid bills on the common areas, the association could prepare an affidavit stating that they have the money to pay the bill. If there is litigation regarding an unpaid bill, the association could post a bond or set the money aside for payment of that debt.
Check with your escrow or closing agent for the correct procedure to follow if you find something objectionable on the title report. If a lender is involved in your purchase, they will require title insurance to protect their interest in the condominium unit. Often special condominium “endorsements” are required which will be attached to the title insurance policy.
The condominium documents or “condo docs” or Covenants, Conditions and Restrictions are normally incorporated in the deed and you should read these carefully, as they set forth all the rights, duties, and obligations of all the unit owners. Your preliminary title report will show the book and page where these documents are recorded in the official country records. You can ask your escrow officer, the homeowner’s association or the recorder’s office for a copy.
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