Why You Need Title Insurance on New Construction

As new home construction picks up, we often get asked why buyers need title insurance on a NEW home.

In reality, construction of a new home raises special title problems for the lender and owner. You may think you are the first owner when constructing a home on a purchased lot. However, there were most likely many prior owners of the unimproved land.

Title Insurance Blog Question

A title search will uncover any existing liens and a survey will determine the boundaries of the property being purchased. In addition, a builder may have failed to pay subcontractors and suppliers. This could result in the subcontractor or supplier placing a lien on your property. Again, lenders want to be sure the property has clear title, and they are insuring the correct property. The Loan Policy is usually based on the dollar amount of your loan and only protects the lender’s interests in the property. Should a problem with the title arise. It does not protect you, the buyer. The policy amount decreases each year and eventually disappears as the loan is paid off. Purchasing an Owner’s Policy will protect you against these potential problems and pay for any legal fees involved in defending a claim as long as you, or your heirs, have an interest in the property. When selecting a title insurance agency, look for a company that is well-established and credible. Call around and ask questions.

Southern Title has been a long time supporter of the real estate development, construction, and sales industry in Volusia County. Our title production team is locally-based and experienced in searching property throughout the County and State, an added plus when you need information quickly or have questions about information on your title commitment. Additionally, new regulations regarding the closing process require title companies to demonstrate compliance with federal consumer financial protection laws, as stipulated in ALTA Best Practices.

Ultimately, you are purchasing peace of mind that will protect your piece of the American Dream. It’s important to ask your Realtor® or builder for quotes, and be sure your title agent is a member of the American Land Title Association (www.alta.org), the Florida Land Title Association (www.flta.org) and demonstrates compliance with ALTA Best Practices.


Lisa BlytheLisa Blythe is the Director of Marketing at Southern Title in Daytona Beach, FL. She is also a Life Director with the Volusia Building Industry Association (VBIA), and was Affiliate of the Year in 2008. She is an active member of the Daytona Beach Area Association of Realtor and was named Business Partner of the Year in 2012. Lisa handles marketing and publicity for the Women’s Council of Realtors, is active in the local government and government affairs committes with the Daytona Regional & Port Orange/South Daytona Chambers of Commerce, and is Secretary of the Port Orange/South Daytona Rotary Club.