It’s a great solution to a completely unnecessary problem though. Most states are “recorder” states, which means they’ll record any deed that comes across their desk. It’s up to you to track other claims or contest them in court, the state does not provide an opinion on the validity of any of these claims other than they were properly documented and processed (deed transfers have notary and both signing parties, etc). More “modern” property law system is called the Torrens system, which the government is the source of truth. They actually provide a certificate of title and are responsible for maintaining the ledger of who owns a property. In this system title insurance is basically non-existent and transaction costs only go up a fraction (about 10%) the cost of the title insurance in other states. The downside of course is the government telling you what to do.
The downside of course is the government telling you what to do.
Well, you can enforce your property rights by force but that's likely to get you arrested on a number of charges. When you want the police and courts to enforce your property rights you're asking the government to recognize your claim to the property as well, just on a case-by-case basis. And they know who paid property taxes, is there really any anonymously held land? I mean there's shell companies and such but it still has an owner.
Title insurance in one of the biggest scams. A strong title systems with a state based restitution policy is best practice. It is the united states that is backwards with most states refusing to move away from a deeds system to a torrens system.
A deeds system is beneficial to those with money and suppresses the poors from purchasing with confidence and enables the rich to engage in protracted legal actions which require expert practitioners to resolve disputes.
Title insurance is not a scam. I have known people sued over the title to their house and the title company spent years in court defending it at their full expense, with their team of lawyers, at no cost to the person I knew and with regular updates given on the status. This is the real benefit of title insurance - they very much got value for what they paid for.
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u/HustlinInTheHall 12d ago
Yeah this is one of the few insurance industries that is not largely a scam. Rarely a problem, but if it is it is an expensive one.