What is property title insurance? Insurance of the risk of loss of ownership (for apartments, rooms, non-residential premises and land plots) Insurance of the risk of loss of ownership of an apartment

They constantly talk about the need to carefully check the history of the apartment, but in reality, even professional realtors and lawyers cannot guarantee that no one will ever encroach on the buyer's property right. It is believed that you can protect yourself from the loss of property rights with the help of title insurance - .. In any case, in its current form.

How to lose ownership

According to Boris Sharonov, director of the NSKA risk department, about 2% of transactions per year are terminated by court decisions as a result of various lawsuits. Ownership can be contested in many cases. These may be errors made during the registration of past transactions, or, for example, cases when the rights of the owner are presented by a person whose rights were violated during the privatization or alienation of real estate: for example, at that time the person did not reach the age of majority, or was imprisoned, or was sick and disabled.

Also, the basis for claims may be the presence of a fake or forged power of attorney when making any of the transactions in the past, making transactions using forged or forged documents, making transactions by incapacitated persons or persons who were under the influence of delusion, deceit, violence, a combination of difficult circumstances or persons unable to understand the meaning of their actions or manage them, making transactions in violation of the rights of co-owners of real estate or heirs and other defects in the right of ownership.

You can lose an apartment if the seller suffers from mental disorders and is duly recognized as incompetent, the acquired property is seized due to the debts of the former owner, as well as as a result of fraudulent activities.

Title Insurance

The mechanism designed to solve the problem is title insurance, which protects the interests of the owner in the event of an unforeseen loss of the apartment. The insured risk in this case is the loss of the property due to the termination of ownership for reasons beyond the control of the insured. The insurance covers the agreed amount (usually the market value of the apartment at the time of the transaction), and the title insurance contract may also cover the costs of litigation.

The first title insurance policy in Russia was issued in 1994 by the Standard-Reserve company. However, according to Boris Sharonov, title insurance did not officially exist until 1998, when insurance companies, including, in particular, Standard-Reserve, Rosgosstrakh, Leader, ROSNO, Spasskiye Vorota, etc., received the first licenses for title insurance.

The expert gives an example from insurance practice: in 1995 a businessman disappeared; many years later, his daughter, having received with the help of certain "professionals" a certificate of his death and a will in her favor, sold her father's apartment. “Subsequently, the deal was disputed by the relatives of the wife of the missing owner. Fortunately, the new owner of the apartment had a title insurance policy, he managed to defend the apartment with the help of an insurance company lawyer,” says Boris Sharonov.

Title insurance only gained momentum with the advent of mortgage lending. Banks aware of title risk insisted that borrowers insure the risk of forfeiture when taking out mortgage loans. Today, most insurers deal with title insurance only as part of their cooperation with banks, and rely mainly on the results of the bank verification of the borrower and the purity of the transaction, therefore, they enter into such agreements almost automatically. However, it must be borne in mind that in this case, the bank, and not the buyer of the apartment, will receive the insurance compensation. That is, in any case, he will lose his property, the bank will receive insurance, and the maximum that a person can claim is the difference between the insurance payment and the balance of debt obligations to the bank.

When they can refuse

According to Tatyana Saxontseva, Managing Partner at Miel-Network of Real Estate Offices, insurance companies sometimes refuse to conclude a title insurance contract due to a high-risk history of transferring rights to a property: a recent inheritance by will, incorrect determination of shares, double sales of apartments in new buildings, violations rights of minors in privatization.

They can also refuse to insure an apartment that came into ownership under a rental agreement, especially if less than a year has passed since the death of the recipient of the rent, in the case of inheritance by distant relatives, sale by proxy.

It should also be borne in mind that insurance only applies to cases where the circumstances for the payment of compensation have arisen independently of the insured. If there was a transfer of the acquired property to other persons under a paid or gratuitous contract (even if the person was misled), he will not receive insurance payment. In addition, payment may be denied if the insured object is not used for its intended purpose (for example, if a residential apartment is used as an office), if there has been a change in the characteristics, properties, design parameters of the property, if the object is subject to seizure from the insured (for example, by fiscal authorities) .

Underwater rocks

There are also not so obvious nuances. The first problem is timing. Most often, the apartment is insured for three years - the statute of limitations for claims in relation to real estate transactions is three years. However, firstly, in some cases, the period may be extended up to 10 years, and secondly, the plaintiff may insist in court that this period be counted not from the moment the transaction was concluded, but from the time when the plaintiff learned that his rights were violated. “But he can find out, appear on the threshold and threaten with a court in 10 or 20 years,” says Boris Sharonov. Paying insurance for all these years is very expensive. The cost is usually 0.2-1% per year, and in particularly difficult cases it can reach 5%. That is, these are tens of thousands of rubles a year for the budget.

Another important point is that insurance will not always cover the risks that the buyer thinks about when concluding an agreement with the company. “Unfortunately, title insurance is not a panacea, since insurance companies often exclude from insurance coverage the occurrence of an event that led to the occurrence of an insured event before the conclusion of an insurance contract, and an insured event during the period of the contract,” warns the general director of the Finans-Nedvizhimost agency » Elvira Dadasheva. – This means that if the reason for which the owner can lose the right of ownership due to the claims of third parties arose before the title insurance (and in general it does), and the insured event occurred already during the period of possession of the right of ownership, then the insurance company won't refund anything." Previously, such cases were very common and, in fact, were an indicator of the dishonesty of insurers - after all, in this case, insurance practically loses its meaning. Now, events in the past are most often insured, but you need to carefully read the contract.

“In addition, the insurance company can dispute the fact that the loss of the property occurred for reasons beyond the control of the insured, emphasizing that the buyer did not check the documents well enough, for example, did not request a certificate of the seller’s legal capacity,” says the lawyer, president "Guild of Real Estate Lawyers" Oleg Sukhov. Therefore, title insurance does not eliminate the need to check the documents and history of the apartment.

Since title insurance is designed to protect the buyer only from the risks associated with the loss of ownership of the purchased property, it does not apply in the event of an encumbrance. For example, you bought an apartment, lived in it for a certain time. Suddenly, a man who has been released from places of deprivation of liberty appears on the threshold. Even if he never owned your living space, but was once registered in the apartment, he has the right to live in it, according to Art. 40 of the Constitution of Russia, - provided that he has no other house. In this case, title insurance does not work, since no one claims your ownership. And you will have to share housing with a stranger.

Abroad

Abroad, the practice of title insurance is more common and provides more guarantees. First of all, due to a clearer definition of the concept of "title". In fact, it is not in Russian legislation; it is not the title as such that is insured, but the risk of loss of property.

In Europe and the US, virtually all real estate transactions involve title insurance. According to Igor Indriksons, the real estate investment manager, the founder of the Indriksons.ru portal, in the United States, an object is insured once for the life of its owner and the insurer pays the client the amount necessary to purchase the same housing at the time of the insured event. Recall that in Russia the amount of insurance is fixed (that is, it does not take into account possible changes in prices on the market) and the contract is concluded for a certain period.

In Canada and Germany, there is not title insurance, but act insurance - that is, guarantees are given not by an insurance company, but by the state. Something happened - the state pays, and then it deals with violators and collects money from them. The fee is paid in a lump sum at the time of the transaction and usually does not exceed 1-2% of the cost of housing. And, for example, in Austria, the fee for the state guarantee is completely symbolic - 0.15% of the value of the object.

According to experts, the best way to increase the effectiveness of title insurance is to make it for life, as the risks of dispossession can arise at any time. However, in Western countries, where the history of an apartment is more transparent, and the mechanisms for protecting the rights of owners are better established, it is more difficult to actually lose the right to an apartment. Therefore, inexpensive life insurance options are possible. In Russia, such insurance will be very expensive.

Title insurance of an apartment is an insurance of the interests of the buyer associated with the loss of ownership of real estate.
Insurance of risks of loss of ownership of an apartment, the so-called. title insurance is the only possible legal protection of the property interests of the buyer related to the possession, disposal and use of real estate. Approximately 1% of owners, according to the Department of Public Housing, are deprived of their rights to residential property for reasons beyond its control. Most often due to the invalidity of the transaction.

There is judicial practice of applying Article 223 of part 1 of the Civil Code of the Russian Federation. This article states that: “Real estate is recognized as belonging to a bona fide purchaser (clause 1 of Article 302) on the basis of the right of ownership from the moment of such registration, except for the cases provided for in Article 302 of this Code, when the owner has the right to claim such property from a bona fide purchaser.” The recognition of a transaction with an apartment made several years ago as invalid served as the basis for the termination of all subsequent transactions.

WHAT ARE THE RISKS IN BUYING REAL ESTATE
Buying an apartment is associated with certain risks associated with checking the legal purity of the purchased object and the correct execution of all documents. Given the cost of the purchase, all kinds of gaps in the legislation, it is logical to seek the advice of specialists.

Using the services of a real estate agency, it is safer and more reliable to conduct an apartment purchase and sale transaction. Unlike lawyers specializing in civil law, they know better the specifics of such transactions. Every day in practice they meet with a variety of non-standard situations, they know all the pitfalls and currents.
In our country, there are no legal mechanisms that would fully protect the owner, even if he is a bona fide buyer. Art. 302 of the Civil Code of the Russian Federation allows you to claim real estate even from a bona fide purchaser. When buying an apartment, as well as in the process of owning it, the transaction may be invalidated due to the fact that the previous transfers of ownership of this apartment were carried out with violations. Title insurance will not protect against loss of ownership of real estate. A title insurance policy will only return the money spent.

In the real estate agency "CREDO", if you find obvious or veiled problems with the apartment, you will be strongly advised to refrain from such a purchase. If you are confident in your abilities and decide to conduct the transaction on your own, then the collection of necessary documents, their analysis, and checking the apartment for legal purity fall on your shoulders. At the same time, even if the history of the apartment, in your opinion, is as clean as a baby's tear, our advice is that if you save on the services of a realtor, do not save on insurance. Insure the title of the property. At least for a couple of years.

WHAT TITLE INSURANCE PROTECTS FROM
The loss of ownership risk insurance policy allows you to insure the risks associated with the recognition of your transaction as invalid for the following reasons:
- making a real estate transaction with an incompetent citizen or a citizen with limited legal capacity, unable to adequately perceive the significance of their actions or their consequences;
- conclusion of an agreement in violation of the norms of the current legislation;
- failure to comply with the terms and conditions of the contract for the sale of real estate;
- purchase and sale of real estate to a legal entity that does not have the right to do so;
- purchase and sale of a property, without the permission of the guardianship authority;
- making a transaction regarding real estate through deceit, violence, threats, and so on (bondage transactions);
- making a transaction with real estate, which is common property, without the consent of one of the spouses;
- violation of the rights of one of the heirs in the division of property;
- violation of the rights of third parties during the privatization of an apartment;
- making a sale and purchase transaction using forged documents and other cases.

Many of the listed risks can be minimized by competently approaching the history check of the apartment and requesting additional documents before entering into a deal.
You need to be especially careful when buying an apartment that the seller got by, from elderly owners, if the apartment changed its owner many times, if one of the owners is a minor ... We also categorically do not recommend buying an apartment if not the owner is present at the transaction, but his representative is acting by proxy.

You can protect yourself from loss of ownership of the acquired property by using title insurance. If, by a court decision, the purchased apartment is taken away from you, the insurance company will pay you the sum insured. Our task is to organize its purchase in such a way that there would be no need to sue! Only as a last resort, or for overly cautious clients, we recommend apartment title insurance.

WHAT CAN I INSURE BY PURCHASING A TITLE INSURANCE POLICY?
To protect a person from losing ownership of real estate, there is title insurance, which implies insurance against facts that happened in the past.

So, the object of title insurance can be:
- residential buildings, apartments, rooms, parts of a house or apartment, cottages, etc.,
- non-residential premises, structures and their parts, garages, production bases, etc.,
- land.

You can also insure legal costs, including the services of a lawyer, if suddenly a dispute about the rights of the owner comes to court.
Title insurance (real estate title insurance) does not protect the owner from the following risks:
- loss of real estate as a result of hostilities, all kinds of civil unrest;
- confiscation or arrest by order of state bodies;
- redemption of a land plot for state or municipal needs;
- termination of the right of ownership to a dwelling as a result of its mismanagement;
- seizure of land for its inappropriate use ...

MORTGAGE AND TITLE RISK INSURANCE
Some banks, when issuing a pledge of purchased real estate, require insurance against the risk of loss of ownership of this object. The owner of the apartment signs an agreement with the insurance company, the creditor bank in this case will be the beneficiary, because. he is interested in the return of the loan.

When issuing a mortgage loan, concluding a title insurance contract, it is required to provide a bank and an insurance company with a lot of documents for the purchased property. At the same time, the borrower believes that since the documents have been accepted, the contracts have been signed, therefore, everything is in order with the apartment, it has been checked and you can sleep peacefully. Often this is not the case. As a rule, documents for an apartment are checked only for their compliance with the approved list.
Insurance, in the amount of the cost of the apartment, or the amount of the loan issued under the contract will be paid to the beneficiary. The buyer in this case will lose both money and property. The bank does not risk anything, because he is not the owner of the property, but only the mortgagee. Insurance payments from insurers are taken into account in the tariffs when receiving an annual insurance premium ...

HOW LONG SHOULD TITLE INSURANCE BE SUITABLE
A title insurance contract can be concluded for a period of 1 to 10 years. It all depends on the specific situation - the history of the purchased property, its price, title documents, the personality of the seller, the object itself ...
In accordance with the legislation of the Russian Federation, the limitation period for real estate transactions is 3 years. Based on this, title insurance contracts, most often, are also concluded for three years from the date of registration of the purchase and sale transaction.
However, the plaintiff, due to objective reasons (he went abroad, served in the army, was in prison ...) could find out that the property, the possession (use) of which he has the right to sell without his knowledge, much later. In this case, the court The limitation period can be established not from the moment the right is transferred (you bought an apartment), but from the date when the plaintiff became aware of this event .

Lawyers argue, and this is confirmed by the rates of insurance companies, that the risk of loss of ownership decreases over time. In the first year after the transaction, it is maximum. On the other hand, if the appeal to the insurance company regarding title insurance does not occur immediately after the transaction, but after a sufficiently long period of time, this raises legitimate questions from insurers.

COST OF TITLE INSURANCE POLICY
The insurance premium (the tariff of the insurance company) is calculated individually. It depends on the property, the nature of the transaction, the conclusion of a legal examination, how long ago the ownership was registered, for how long the contract was concluded and usually ranges from 0.2% to 0.5% of the cost of insurance (the value of the object or the amount of the mortgage loan ). This amount is paid by the insured annually.

By entering into a title insurance contract, you will be completely sure that the ownership of the property will remain with you or you will receive the amount of money specified in the contract.
Specialists will help you choose an apartment, arrange a deal for its purchase and sale. Our services save not only your time and money. We care about the reliability of investments in real estate, about the peace of mind of our clients.

Real estate insurance is in high demand due to the fact that the vast majority of banks will not agree to provide a mortgage loan without appropriate insurance. Yes, according to the law, the insurer has the right to refuse it within 5 days after the insurance is issued, but then the bank has the right to refuse the borrower a loan or increase the percentage for using borrowed funds. As a result: insurance is necessary and more and more borrowers make out exactly title insurance (insurance of the risk of loss of ownership of an apartment). Today we will talk about what real estate title insurance is and how much this service costs.

Definition

Title insurance is called insurance, designed to protect a bona fide buyer of real estate from the risk of losing ownership of it. The risk of loss of ownership due to a defect in title is insured, which means a document certifying this ownership (contract of sale). It is a mistake to assume that any loss of ownership will be recognized as an insured event in title insurance. The loss of real estate due to fire, explosion, earthquake, intentional destruction, etc. will not be recognized as an insured event.

Almost always, the right of ownership is acquired in the course of a sale and purchase transaction, but very rarely the chain of its participants is limited to only the buyer and the seller. Much more often the object passes from one owner to another several times. In the process of such transitions, it is quite likely that there may be violations of the law, for example, due to infringement of the rights of third parties. As a result, the property may become the subject of litigation, and the purchaser is deprived of his right of ownership by a court decision. Title insurance will cover this loss.

List of probable insured events

An insured event when concluding a title insurance contract for real estate transactions is recognized as any ground for invalidating a contract of sale. The reasons for the occurrence of an insured event can be very different, from a conscientious error to outright fraud. But in any case, the insured protects his property interests with insurance, according to which the insurance company will return to the client the entire amount spent on the transaction.

Not only an apartment can become an object of title insurance. Insurance contracts are also concluded for land plots, parts of residential or industrial premises, and other real estate objects. Moreover, it is possible to insure not only the loss of property rights, but also the loss of the right to dispose of real estate, use it, own it.

Some of the most common reasons for loss of title include:

• Infringement of the property rights of third parties (minors, heirs, other co-owners, etc.). For example, the apartment was sold, but the minor registered in it was not provided with another living space for living;
• The illegality of an earlier transaction of sale, donation, transfer of real estate by inheritance, etc. For example, the right of a minor to inherit a part of the living space that has become the object of a sale and purchase transaction has been violated;
• Forgery of title documents by the seller. In this case, the norms of not only the Civil Code of the Russian Federation, but also the Criminal Code of the Russian Federation are violated;
• Fraud;
• Errors when registering a new property right. These can be identified when registering the property rights of the previous owner, which will automatically prevent the new owner from registering his rights;
• The incapacity of any party to the sale and purchase transaction;
• Unauthorized court decision, by virtue of which the completed sale and purchase transaction is declared invalid.

Also, title insurance of an apartment is a very popular service when applying for a mortgage.

Almost always, when applying to a bank for a mortgage loan to buy an apartment on the secondary real estate market, the borrower will be required to insure the title. Sale and purchase transactions in the secondary market are considered very risky. This is not the only type of insurance that is required to be issued to the buyer of an apartment in a mortgage, most often banks additionally require property insurance against fire.

How much does title insurance cost?

The amount of insurance depends on how much the apartment or other property is valued. The price from the contract of sale or the BTI real estate appraisal is taken into account. The most commonly applied tariff is 0.5-1% of this price. Accordingly, when evaluating an apartment, say, at 1 million rubles, the price of title insurance will be 5-10 thousand rubles.

These are the rates per year of insurance. If the client wants to initially insure the title for several years in a certain insurance company, then any period from 1 to 10 years can be called the insurance period. The amount of insurance in this case will increase in proportion to the number of years of insurance with a small discount. The deadline for insurance is based on the norms of the current legislation. According to the Civil Code of the Russian Federation, transactions can be challenged in court no more than 3 years after they were made However, in some cases the limitation period may be extended up to 10 years.

When an apartment is mortgaged, it is important to understand that title insurance will not be tied to the loan amount. The risk of loss of property rights is insured, not a loan. Therefore, it does not matter how much the mortgage is issued for, the price of insurance is not tied to the loan amount, but only to the assessed value of the property.

One type of fraud is the deliberate overpricing of an insured title. In this case, the insurance company is forced to pay the client an amount that significantly exceeds the value of the property upon the occurrence of an insured event. If the insurer establishes a fraud, then the insurance contract will be declared invalid. The client will not receive insurance compensation.

Why can a sales contract be cancelled?

Cancellation of the contract of sale is the most common insured event in real estate title insurance. The decision of the court most often becomes the basis for the annulment of the contract. The plaintiff in such a case is the owners whose rights were violated during the transaction.

Under current law, a real estate purchase and sale transaction may be invalidated when:

1. Violates any law or other regulation.
2. It is a cover for another transaction.
3. It does not imply that the buyer will acquire ownership of the property.
4. It was committed by a person who does not have full legal capacity.
5. The seller is a minor over 14 years of age.
6. Made by the seller under the influence of some delusion.
7. It was committed by a capable person who, for certain reasons, did not give an account of his actions.
8. Committed under the influence of the threat of violence, other coercion.

It is extremely important before you choose an insurance company and draw up a title insurance contract, personally make sure that the documents for the apartment are in perfect order. It is extremely difficult to do this on your own, since only an experienced real estate lawyer can understand certain legal nuances. First of all, the buyer himself is interested in checking, since the establishment of errors in the documents by the insurance company can be interpreted as the client's intent to commit forgery and fraud with insurance.

They say that insurance- this is a relatively honest method of taking money from the population. This is, of course, a joke. But there is some truth in every joke.

But still insurance- a useful tool for real estate. And in some cases, irreplaceable. Especially, insurance of the transaction of purchase and sale of an apartment, i.e. loss insurance ownership for an apartment, or as it is correctly called - property title insurance.

Of all the "guarantees" that real estate agencies generously reward their clients with, this guarantee ( those. real financial compensation for the loss of ownership of the apartment) has only title insurance policy.

Title Insurance, usually occurs when buying an apartment, so this type of insurance is commonly called deal insurance with an apartment.

In general, there are four main type of insurance (they should not be confused):

1. Title insurance (protection of the owner of the apartment from loss of ownership);
2. (protection of the creditor bank from the risk of losses on the issued mortgage loan);
3. Developer liability insurance (protection of investors' investments in housing under construction from the loss of this money);
4. (protection of the apartment from physical damage or destruction - from fire, flood, destruction, etc.).

Let's consider them in order.

Property title insurance is an insurance against the risk of loss/loss ownership (those. fundamental right, "title") for the purchased apartment. Loss ownership can only occur by a court decision, if . This is insured event , and the insurance company ( insurer) compensates the owner ( to the insured) complete market value of the apartment .

May also cover risks associated with reclaiming it from illegal possession . For example, the risk of selling an apartment against the will of the owner is a fraudulent transaction when the apartment was sold without the knowledge of its real owner.

Not all insurance companies offer this service. real estate title insurance, but a number of large insurers have such a product in their arsenal.

Agreement ( policy) property right insurance can be concluded both before the real estate object, and after registration. But it comes into force, in any case - after registration ownership.

You can insure the title for the full market value of the apartment, regardless of the amount indicated by the parties in.

When buying an apartment with, title insurance may be required by the bank as well as life and disability insurance of the borrower).

Title insurance (apartment purchase and sale insurance ) is usually used for transactions on . Right here ( Unlike) there are many options for losing ownership The buyer, especially if the apartment was previously inherited, or resold several times ( after all, any of the previous transactions can be challenged). Ownership insurance also saves from the secondary market.

When issued, creditor banks always insure their financial ( credit) risks. The bank thus protects itself from possible non-payment ( or incomplete payment) loan by the borrower. Despite the fact that during a mortgage, the apartment purchased by the borrower remains as a pledge from the bank, the bank is additionally reinsured in case this apartment burns down, collapses, loses its value, etc.

By law, when applying mortgage loan the borrower is obliged insure only the collateral (apartment) from damage or complete destruction ( property insurance - see below). But in practice, banks require additional guarantees in the form of life insurance the borrower his disability insurance , as well as title insurance (see above) for the purchased apartment.

Eventually, mortgage loan insurance is a comprehensive insurance of all kinds of risks, aimed at protecting the financial condition creditor bank .

All this comprehensive mortgage insurance occurs, of course, at the expense of the borrower. Term mortgage insurance, usually equal to the period for which it is issued.

Developer Liability Insurance

Here we are talking exclusively about primary housing market. About the relationship between developer and the Buyer of the apartment ( shareholder), provided that they operate within the framework of .

From January 1, 2014, in the famous law " About participation in shared construction…» amendments have come into force that provide for additional measures to ensure liability Developers in front of equity holders, in the form bank guarantees or insurance. When insurance, Developer may choose the insurer of his choice - or insurance company , or Mutual Insurance Society (OVS) .

It's kind property insurance associated with the risk of physical damage or complete destruction of the apartment. The reason for this may be accidents, various kinds of natural disasters or the human factor - these types insured events expressly stated in the insurance contract.

The essence of this type of insurance is that the owner of the apartment receives insurance compensation (financial compensation) upon the occurrence insured event if this case is provided for in the contract.

Not directly related to real estate transactions , except in cases where it is an integral part of a complex mortgage insurance (see above).

VIDEO: Property Insurance and Damage Compensation

— Principles of real estate insurance against physical damage: what are insured events, what compensation can be expected?

Memo to the insured

With any type of insurance, it should be remembered that insurance "works" ( those. money is paid) only when insured event . BUT insurance case - a very streamlined concept, which is taken into account only if such a case exactly coincides with legal wording of the insured event , which is indicated in insurance contract .

Considering that each insurance company has a large staff of lawyers, and each insurance company tries, if possible, to avoid paying insurance compensation , legal wording insured events written in such a way that they can be interpreted in different ways. This means that the insurer has the opportunity ( loophole) "legally" get away from insurance payment .

To the insured ( those. the person who is insured) follows all formulations insurance contracts carefully examine ( better with the help of a qualified lawyer), and possibly rewrite and agree with the insurer in a more appropriate version, in order to be sure exactly which events the insurer considers to be insurance case .

Conclusion: Although insurance provides a real financial guarantee ( compensation), but in practice it is not so easy to get it. Therefore, despite the possibility apartment purchase and sale insurance, independent study real estate transaction rules significantly increases the security of the transaction, and reduces the risks for the Buyer of the apartment.

To this end, we have developed a detailed STEP-BY-STEP INSTRUCTION (see below).

"REALTOR'S SECRETS":

Rules for preparing and conducting an apartment purchase and sale transaction - on an interactive map Will open in a pop-up window."> STEP-BY-STEP INSTRUCTIONS (will open in a pop-up window).

Transaction insurance when buying an apartment is a fairly popular, and most importantly, useful procedure, with which you can get additional guarantees of the reliability of the transaction. This procedure is called "title insurance". Let's take a closer look at what it is and why it is needed.

What is title insurance

Title insurance is insurance of the very right of ownership of the apartment, which is received by the new owner when concluding a contract for the sale of real estate. This type of insurance, unlike conventional real estate insurance, does not provide compensation in the event that the apartment burns down, is destroyed, and so on.

Title insurance reimburses the insured person for the market value of the apartment in the event that the buyer has lost ownership of the apartment not due to his own actions, but, for example, due to a court decision, fraudulent transactions, and so on. It is this type of insurance that is rightly considered the most relevant and in demand during registration.

Title insurance does not apply to the primary market, since when buying a home from a developer, problems arise many times less, the apartment has no previous owners and, as a result, there is no likelihood that the ownership of housing will be challenged through the courts.

Example: The apartment is being sold by a person who knows perfectly well that in order for the transaction to be completely legal, he must do it. Otherwise, the spouse may challenge the transaction in court and demand that the housing be returned to the previous owner, since in fact, despite the fact that the apartment is registered to her husband, it is joint property. In fact, the wife is aware that the housing is for sale, but she is in cahoots with her husband and plans to receive both the money for the apartment and the return of her property. After the conclusion of the transaction and full payment, the scammers go to court and return their housing to their property. At the same time, they do not return the money, declaring that they have already been spent, they have no other property, savings, too, and so on. In theory, a deceived buyer can claim money through the courts, but this takes time, and it’s not a fact that they will return the entire amount. They can assign monthly payments that will drag on for decades. And if the buyer at registration also concludes a title insurance contract, then the entire market value of the housing will be reimbursed by the insurance company.

Features of title insurance

Title insurance has its own characteristics, consisting in what and against what can be insured. The only drawback of such a system is the cost of insurance itself, which is relatively high. However, if we consider the situation from the point of view of the possible loss of the entire amount spent on the purchase of an apartment, then even the impressive price of insurance will seem insignificant.

The very fact that the insurance company agrees to sign such a policy indicates that the deal is more or less fair. But if an insurance company, which in a normal situation is ready to sign such contracts, refuses to do so, then the probability that the buyer will be deceived is almost 100%. As a result, such a deal should be immediately abandoned.

Advantages

• A title insurance contract can be signed not only after the registration of ownership, but also in advance, even before the transfer of ownership. However, it comes into force only after the client becomes the owner of the new apartment.
• A minimum of documents is required to apply for a policy. Usually a passport and real estate information is sufficient.
• Insurance companies can not only reimburse the entire market value of the apartment, but also participate in court hearings, acting as an interested party. As practice shows, when scammers find out that the client will insure the title, they themselves refuse the transaction, since it becomes much more difficult to avoid liability.
• Before signing the insurance contract, the IC (insurance company) independently analyzes the future home of its potential client. This helps to immediately identify and detect all the most controversial points. It is logical that the UK is not interested in paying insurance compensation to anyone. As a result, the UK will insist that the transaction takes place strictly according to the rules, which also excludes most fraudulent schemes.

Title insurance provides security simply by the very fact of its existence. Most often, if the UK takes on the signing of such a policy, the transaction is brought into a state close to ideal. So, direct insurance compensation is made only in some rare, unaccounted for cases, when it was simply impossible to foresee the problem.

What can be insured

Not all objects can be insured in this way. Title insurance is allowed only when purchasing the following properties on the secondary market:

• non-residential premises: including here both separate premises and full-fledged factory complexes, consisting of many workshops.
• Living spaces: starting from a small share in the apartment and ending with huge houses.
• Land: most often, those areas that are under the insured houses are insured, but if nothing has been erected on the land, then such a site can be insured separately.

What can be insured against

Title insurance provides payments in the event of the following risks:

• Transfer or sale of housing as a result of deception or coercion.
• Recognition of the purchase and sale transaction as invalid.

In the first case, everything is quite clear: if a person is forced to sell an apartment (or is somehow deceived so that he loses his property as a result), then under such conditions the insurance company compensates for the entire cost of housing. But the second type of risks needs a more detailed description. It includes the following situations:

• The deal was concluded with an incapacitated/partially incapacitated person.
• The deal was made with a man who at that time could not understand the consequences of his actions.
• The transaction was concluded without the consent of the spouse and so on.

Simply put, title insurance with almost 100% guarantee ensures the reliability of any transaction for the purchase and sale of real estate. The only exceptions are situations that are not insured events.

What is not an insured event

Any other situations not described above are not insured events. As mentioned earlier, if the apartment burns down, the house collapses, and so on, all this will not be considered an insured event. Separately, it should be noted the fact that you need to carefully read the contract with the insurance company. Often there are additional conditions, rules and requirements, in case of failure to comply with which the client also loses the right to insurance compensation. For example:

• The client is obliged to apply to the insurance company for compensation within a period of up to 1 month from the moment the problem arose.
• The client is obliged to work only with lawyers and lawyers accredited by the insurance company and so on.

How to insure a transaction when buying an apartment

The procedure for issuing a title insurance contract is quite simple. Let's consider it in more detail.

Procedure

1. or find a suitable apartment on your own.
2. Discuss with the seller the terms of the future transaction, warning in advance that a title insurance contract will be drawn up. Since the buyer will pay for it and he does not depend on the seller in any way, this will not cause any trouble for normal owners. But if the seller planned in advance to deceive the buyer, at this stage he can refuse the transaction.
3. and request documents for its verification.
4. With the documents in hand, start looking for a suitable insurance company.
5. Contact the insurance company, explain the situation, provide documents.
6. Wait until the specialists of the UK conduct their own check based on the papers provided.
7. Conclude a title insurance contract with the UK and pay for the policy.
8. Conclude a sales contract with the seller.
9. Establish ownership of the home. At this point, the title insurance contract comes into effect.
10. Sign and request from the seller a receipt for receiving funds for the apartment.

The fact of the transfer of money is not controlled by anyone except the buyer. If problems arise at this stage, the insurance indemnity will not be paid, as there will be no confirmation of the fact of payment. As a result, it is essential. Sometimes it is combined in one document with the act of acceptance and transfer, but it is better if this is drawn up as a separate document.

Documentation

Directly to the insurance company to check the apartment you need to provide:

• Passport of the client, so that it is clear who exactly the buyer is.
• The seller's passport, so that you can verify the data on the documents with an identity card.
• Extract from the USRN for the acquired property. Now such a document replaces a certificate of ownership. It is one of the most important papers by which you can check both the fact that the seller has the right of ownership, and possible encumbrances. An extract is needed as fresh as possible, preferably received no later than 1 month before the date of execution of the contract.
• Registration certificate for the apartment. This document allows you to determine the presence or absence of . Sometimes this can make a huge difference.
• Extract from the house book. A very important document, on the basis of which you can understand who exactly is registered in the apartment. Ideally, the seller should be required to write out all the registered persons before the end of the transaction, but this is not always possible (there may simply be nowhere to sign out). If minors are registered in the apartment, then this can become a problem, since it is impossible to write them out “to nowhere”. Also, if minors are co-owners of housing, permission from the guardianship authorities is required to sell the apartment.
• Consent of the spouse of the seller. This document is relevant only if the seller is married and there is even the slightest chance that the apartment is not in his personal property.

The fact that 1 person will appear in the USRN statement does not mean anything. When buying real estate, the rights to it arise for both spouses and it does not matter which of them is considered the owner according to the documents. It is quite difficult to prove the fact that housing is personal and not joint property, therefore it is much easier to always require the consent of the spouse. Even if the buyer does not do this, the IC will put forward such requirements, otherwise the company will simply refuse to draw up a title insurance contract.

Expenses

The amount of insurance compensation is indicated directly in the contract. It must correspond to the market value of the apartment at the time of signing this document. In practice, the amount may be slightly lower (by about 5-10%), but it's still better than nothing. It is also necessary to take into account the fact that the price does not depend on the cost of housing, which is indicated in the contract of sale.

The cost of an insurance policy depends on the following factors:

• The price of the apartment (market price) is the amount of compensation.
• The period for which the apartment will be insured. As a rule, the first year is the most expensive, then the price decreases.
• Possible risks. The higher the IC estimates the likelihood that the client will have problems, the more expensive the insurance will cost. By the way, this can also be a good signal of potential problems - the higher the rate of the insurance company, the more likely it is that problems will still arise.

Example: On average, the rate is about 0.3% of the market value of the apartment (the amount of compensation). If we assume that the apartment is worth 10 million rubles on the market, then the insurance policy will cost approximately 30 thousand rubles.

Timing

The contract itself is concluded in about 1-2 days. In some cases - 1 week, but only very rarely - longer. But its duration depends on the client. It can be either 1 year or 10 years. Most often, such an agreement is concluded for 3 years (the statute of limitations). This does not give guarantees that the statute of limitations will not be restored, but still most of the problems disappear by themselves during this time.

Example: If the seller inherited the apartment, and he immediately sells it, it is likely that other potential heirs will challenge the deal. The limitation period for such cases is 3 years, but only on the condition that the heir knew or should have known that the testator died and left the apartment behind. However, if the heir did not know about this (for example, he was on a very long business trip, where he did not have access to the Internet, telephone and other means of communication) and can prove this, then the limitation period can be restored even after 10 years.

How insurance is paid in case of problems

Payment of insurance compensation is carried out in strict accordance with the contract. Specific conditions may vary depending on the selected SC and the situation. On average, if there are no reasons for delaying payments and other problems, the payment is made approximately up to 1-3 months after the client's request or the final court decision.

Title insurance helps to solve a significant part of the problems, however, it does not always help with the execution of the transaction, which may cause risks and other disputes that are not directly related to the loss of ownership. Only experienced lawyers can point them out in advance. At a free consultation, they will talk about the main problems that may arise in such a situation. Also, specialists are ready to accompany the entire transaction, from the moment the seller is searched to the registration of ownership. By combining competent legal assistance and insurance, you can almost 100% get rid of any unwanted situations.