Review of all things Real Estate: Understanding uninsured deeds

I am often asked about why title insurance is an important item in a transaction; it can be confusing to consumers who are not involved with frequent real estate transactions.

The following comprehensive title insurance information is provided courtesy of First American Title Insurance Company, it is a useful read which will likely elicit several “aha” moments; enjoy!

What is an uninsured deed?

An uninsured deed is a deed that has not been examined by the title company. Most issues arising from uninsured deeds come from quitclaim deeds or grant deeds when family members, especially spouses, or other persons are added or removed from a property’s title, often for little or no consideration. When a person is added to title, liens recorded against them may attach to the property.

Why do uninsured deeds cause concern?

To verify that the grantor intended to grant the property to the grantee, the title company may ask for an uninsured deed affidavit. As additional verification, the title company may also ask the following questions:

- Can all the signatures on the uninsured deed be verified?

- Is there a divorce in progress?

- Was the deed signed under duress?

- Was adequate consideration given to the grantor?

- Is there a possibility of bankruptcy?

If you believe the chain of title for your property contains an uninsured deed or you have any questions regarding how to identify an uninsured deed, contact your First American Title representative.