Legal Question in Real Estate Law in New Jersey

Re: Title Insurance

I CONCUR WITH JOHN. THE INSURANCE SERVES MULTIPLE PURPOSES: GUARANTEES GOOD TITLE, CURRENTLY AND IN THE FUTURE. MOST, IF NOT ALL, MORTGAGE COMPANIES (FOR RESIDENTIAL OR COMMERCIAL) WILL INSIST ON IT. GRANTED, DEPENDING UPON THE PURCHASE PRICE, IT COULD BE COSTLY (THE STATE SETS THE RATES SO THE COST IS UNIFORM FOR EVERY COMPANY) BUT YOU ONLY PAY THE PREMIUM ONCE (NOT ANNUALLY LIKE LIFE INSURANCE). AS AN ASIDE, THERE HAVE BEEN MANY CASES WHERE PROBLEMS UNKNOWN AT THE TIME OF CLOSING HAVE REARED THEIR UGLY HEADS LATER ON, AND HAVING THE INSURANCE IS GOOD PROTECTION.

Re: Title Insurance

In New Jersey, it is customary for the buyer to purchase title insurance to protect themselves against the possibility the the seller may have passed less than adequate title. In contrast, the California custom is for the seller to buy title insurance to ensure that they have transferred what they purport to sell.

If you are buying on your own, for cash, you need only what you choose to have. If you do not have title insurance, you take the risk. If you are buying through a mortgagee, no doubt they will require a title insurance policy from a reputable company.

So, the bottom line is that, in New Jersey, as a buyer with commercial financing, you probably have no choice. Otherwise, you probably do. That said, it is probably a good idea to have a title report. Any title insurance company can give you one. That will tell you any problems with title and you can assess the risks accordingly.