DC TITLE INSURANCE

A DC title insurance policy is a 'contract of indemnity' that agrees to pay for losses up to the face amount of the policy under the following circumstances; if the state of the title is different than ¡t is set out in the policy and if the insured suffers a loss as a result of the difference. Your title company’s policy insurance is guaranteed by its underwriter.

DC home buyers can be at risk for serious financial loss due to title defects. U.S. law recognizes many rights, claims, interests and encumbrances for real property, so buyers benefit from, and lenders will require, a title search and examination before settlement. This process will identify issues with the title the seller can legally convey, along with the rights and interests of all other parties relating to the property.

Who Chooses The Title Insurance Company in DC?

The Real Estate Settlement Procedures Act (RESPA) Section 9 & Title Company Selection prohibits a seller from forcing a buyer to purchase title insurance from a particular title insurance company as a condition of sale under the specified conditions.

The seller may, in most situations, condition the sale of property on the use of a particular title insurance company if the seller purchases and pays for the entire cost of title insurance (owner’s and lender’s policies);

Sellers are prohibited from “directly or indirectly” conditioning the sale on buyer’s purchase of title insurance from a specific company. “Directly or Indirectly” means transactions which result in the seller recovering the cost for the title insurance through some otherwise seemingly unrelated fee or charge;

In order for Section 9 to apply, the use of a particular title insurance company must be a true condition of sale. There are various interpretations of this clause. Some legal experts support the interpretation hat the buyer can be rewarded by using seller’s preferred title company, or penalized for not using seller’s preferred title company.

How Does A Title Company Issue Title Insurance?

The title company researches property ownership, liens and encumbrances, property taxes, chain of title, unreleased deeds of trust, association fees (if applicable) and water utility bills as required by the District. In the case of single family homes, the title company will also order property survey showing property lines and boundaries, encroachments, etc. The title company issues title insurance guaranteed by an underwriter and provides evidence of ownership to the new owner. This title will be designated as ‘Marketable’ or ‘Insurable.’ Marketable title is the most common designation. Typically referred to as ‘clean title,’ it shows the property is free of outstanding liens, issues or encumbrances. ‘Insurable title’ means there may be a ‘cloud’ on title due to an unreleased deed or deed issue, lien unpaid fees or fines, etc. Buyers purchasing foreclosures and REOs are most likely to receive ‘insurable’ title. The tile company and its underwriter assess the related risk and it is their choice whether or not to assume it. It is also the buyer’s choice as to whether or not they wish to accept ‘insurable’ title as this could lead to issues when reselling or refinancing the property. The longer issues are left unresolved, the more difficult they are to clear.

Is District of Columbia Title Insurance Pricing Regulated ?

The answer is yes, and no. Until 2011, DC title insurance premiums and settlement fees were negotiable. Title underwriting companies published rates and title agents negotiated with consumers. The revised laws that took effect in 2011 regulated and licensed title insurance underwriters, agents, rates and affected continuing education requirements. Large real estate brokerage firms with affiliated business arrangements with title companies benefitted from the change, which resulted in increased costs to home buyers. These arrangements are typically between real estate brokers, mortgage lenders and/or title insurance companies. Read the Washington Post article

The TRID Improvement Act of 2017, H.R. 3978, amends the manner in which title insurance premiums are disclosed under the TILA/RESPA Integrated Disclosure (TRID) rule. It provides that the disclosed charges for any title insurance premium be equal to the amount charged for each individual title insurance policy, subject to any discounts as required by either state regulation or the title company rate filings. The bill passed the House and is, as of November 2018, still being considered by the Senate.

What is a Reissue Rate ?

A reissue rate is a title policy discount afforded to buyers of properties owned by the seller for less than ten years and that seller purchased a title policy during that time. Reissue rates can vary according to the underwriter.

More on resissue rates

What Does A Title Insurance Policy Cover?
  • A DC title insurance policy should cover claims arising out of title “clouds” that could have been discovered in the public records and “non-record defects” not discovered in records after a complete search
  • The policy should protect the insured for as long as they, their heirs and devisees, hold title to the property
  • Title policies offer protection available against latent defects of title which do not appear of record such as forgery, impersonation, capacity of parties, faulty acknowledgments and mechanic’s and mechanics liens.
Lender and Owner Policies
Your lender will require DC title insurance to cover the lender against the things mentioned above. This is called the Lender’s Policy. Policy issuers feel buyers should have title insurance for the same reasons. This type of coverage is called the Owner’s Policy. Owner’s policies are optional for buyers. Contact your title company for an explanation of this coverage, its term and cost.
What Is A Preliminary Title Report?
Your title company will issue a Preliminary Title Report, which is a disclosure of title conditions and property information used to secure your title insurance policy through its underwriter. Included  will be the vesting (way in which title is held) and identity of the current owners, liens and judgments of  record, details of the property, including its legal description, along with easements and encroachments and other exceptions, if any exist. Home buyers should make sure the legal description of the property matches that of the MRIS listing information and the information contained in the purchase contract. The legal description consists of the Lot (land parcel), Block, Square and, depending on the property type and location, subdivision, and/or condominium unit number CC&Rs (Covenants, Conditions and Restrictions), common area interests and conveyances. For single family homes and vacant land, the description will also include the property’s boundaries, tract, historic district and/or property designation and restrictions, if any, and a survey map detailing the lot boundaries and dimensions. You can look up the property’s square and lot on the D.C. Office of Tax and Revenue’s Real Property Tax Database by searching its address. Additional information in the database includes current owner, assessed value, and physical description. An alternative is to search the D.C. Atlas from the Office of Planning. Your Preliminary Title Report will also address property taxes, which are listed as liens. Property taxes must be current at or prior to transfer, so any outstanding property taxes are prorated and paid through title at settlement. Other primary liens are mortgages, current and prior (unreleased) deeds of trust. Your title company should obtain releases for all unreleased DOTs rather than simply providing exceptions. This will assure you of a clean chain of title.
More DC Resources
Conduct Plat Map Research Historic real estate atlases, or “plat” maps, show the footprints of each building extant in the city at the time the atlas was published. The Washingtoniana Map Collection includes atlases published by Hopkins (1877-1890s) and Baist (1903-67). Some early Baist atlases (1903-1919) have been digitized by the Library of Congress and are available online. Atlases are arranged by volume for different parts of the city. Plat maps convey basic information about a property such as lot dimensions, building dimensions and material. These maps also can help you note old lot numbers, old street names, and old subdivision names. Studying maps over time gives a sense of the gradual development of the neighborhood surrounding your home, and shows what existed before your home was built. You can also look for changes to the shape of the footprint to investigate alterations made to the home.
Find Original Permit to Build Washingtoniana has microfilm of building permits from the National Archives collection, all permits issued from 1877-1949. The most important permit to find is the “Permit to Build,” and the best way to find that permit is to search the Building Permits Database (now available online at HistoryQuest DC). The database includes most of the information from the original permit, including date of construction, architect, builder, owner, materials, dimensions, cost and use of the building. Permits issued after 1949 are available at the D.C. Archives. You may also choose to look at the permit as it was originally issued, by consulting the building permits on microfilm. The original permit may include additional information not found in the database, such as plat drawings or inspector reports. If the permit has the note “plans on file,” the plans for the property are available at National Archives in College Park.
Find other Permits There may be other permits associated with a property in addition to the Permit to Build, such as permits to renovate, to build an addition or a garage, to add additional stories or a new facade, etc. These permits can be accessed using the microfilm indexes: By Square Number 1877-1928 By Subdivision 1877-1908 (for property in Washington County — above Boundary St./Florida Ave. — east of Anacostia River; consult plat maps for subdivision names) By Street Address 1928-1958. For recent or current DCRA permit research, try PIVS
Research Ownership The Recorder of Deeds has a database that traces transfers in ownership of a property from 1921 to the present. [Site requires you to create a free account or login and accept terms as a guest.] Other resources for researching ownership are the Washington Board of Realtors Transaction Fiche (1920s – 1980s) and the Assessment Directories (1886-present). All of the above are organized by square and lot.
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