01
Does an owner's title policy cover a forged deed?
The Texas Department of Insurance lists invalid documents as a defect an owner's policy addresses. That covers forgery, fraud, undue influence, duress, incompetency, incapacity and impersonation. A deed signed by somebody pretending to be the owner does not pass good title. Without a policy, the loss from that bad signature lands on the buyer who paid for the home.
What a strong answer sounds like
A good answer points at the Department's own list of covered defects. It sounds like this: the policy addresses a forged signature, a fraudulent release, or a signature taken under duress. The title company should be able to show that list rather than describe it from memory.
Red flag
A closing agent who answers that fraud is rare is answering a different question. Rarity is not coverage. The thing to confirm is whether the defect sits on the Department's list of what the owner's policy addresses, because the list is what gets paid on.
02
What if the person who sold the house had no authority to sell it?
Failure of any person or entity to have authorized a transfer or conveyance is on the Department's covered list. So is a document executed under a falsified, expired or otherwise invalid power of attorney. One partner signing for a company that never approved the sale creates a claim against the new owner. The policy stands between that claim and the buyer's money.
What a strong answer sounds like
A good answer names the paperwork behind the signature. That means the entity document, the trust, or the power of attorney itself. For a power of attorney, the question is whether it was still live on the day of signing. An expired one is named on the covered list.
Red flag
Treating a notary stamp as proof of authority is the common miss. A notary confirms who signed, not that the signer was allowed to sign. Authority comes from the entity document or the power of attorney. A stale power of attorney is the exact gap the owner's policy covers.
03
Is a deed that was never signed or notarized properly still a problem years later?
A document affecting title that is not properly executed, signed, witnessed, notarized or delivered is a covered defect. Paperwork errors do not cure themselves with age. A deed from three owners back can be challenged long after everyone involved has moved on. The owner's policy covers the loss from that break in the chain.
What a strong answer sounds like
A good answer separates the two jobs. The title company examines the record for execution errors. The policy then covers the loss if one was missed. Hearing both halves is the signal that the buyer is being told about coverage and not just about the search.
Red flag
An answer that the title search came back clean is incomplete. A search reports what the record shows. A defective delivery or a missing witness may not show there at all. The reason to hold the policy is the error nobody found.
04
What happens if a document was never recorded in the public records?
A document not properly filed, recorded or indexed in the public records is on the covered list. An instrument that exists but sits under the wrong name is close to invisible to a later search. A lien or an old deed can surface after closing. The owner's policy addresses the loss, even though the mistake was made in somebody else's transaction.
What a strong answer sounds like
A good answer names two separate failures. The company examines the public records, and the policy covers a document that was misfiled or never indexed. A buyer should hear that an indexing error is a covered defect rather than a search problem the buyer absorbs.
Red flag
An answer that everything was recorded correctly this time misses the risk. The exposure is the recording that happened years ago. An owner's policy reaches back to problems that arose before the purchase, and misfiled documents are one of them.
05
Can an heir nobody knew about claim the house after closing?
Ownership claims by undisclosed or missing heirs sit on the Texas Department of Insurance list of covered defects. An estate that passed without clear paperwork can leave a child or a sibling holding a share. That person can appear after closing and claim an interest. The owner's policy covers the loss, and it runs as long as the buyer or the buyer's heirs own the land.
What a strong answer sounds like
A good answer traces how the seller came to own the property. The words probate, estate or heirship anywhere in the chain are the cue to ask who signed and who did not. The coverage line to hear is that a claim by a missing heir is a defect the owner's policy addresses.
Red flag
A seller's word that the family all agreed is not coverage. Family agreement is not a recorded conveyance. The claim that costs money comes from the relative nobody mentioned, which is the case the Department names outright.
06
Does title insurance cover a foreclosure that was done wrong?
A defect arising from an improper prior foreclosure is on the covered list. A foreclosure that skipped a required step can leave the former owner with a claim on the property. A buyer who bought later inherits the argument, not whoever ran the sale. The owner's policy covers the loss from that defect.
What a strong answer sounds like
A good answer surfaces the foreclosure before closing, not after. The question is plain: did this property go through a foreclosure, and when? The answer on coverage is that a defect from an improper prior foreclosure is one the owner's policy addresses.
Red flag
Being told that a foreclosure sale wipes the slate clean overstates it. A sale run improperly can still be attacked. The buyer holding the property when that happens is the one who needs the policy, which is why a foreclosure in the chain is worth a direct question.
07
Am I responsible for a previous owner's unpaid liens?
The Texas Department of Insurance lien examples include a previous owner's unpaid mortgage or deed of trust, judgment, tax or special assessment, and homeowners association charge. They also include statutory or constitutional contractor's, mechanic's and materialman's liens. Liens for labor or materials furnished without the owner's consent are listed too. A lien that attached before the purchase can follow the land.
What a strong answer sounds like
A good answer names what is being searched: mortgage payoffs, judgments, unpaid taxes, association charges and unpaid contractors. A remodel finished shortly before the listing is worth a direct question about who was paid. The coverage line to confirm is that a contractor's lien left by the prior owner is a covered defect.
Red flag
A payoff statement at closing settles the debts anybody knew about. An unpaid contractor from last year's remodel may never appear on it. The owner's policy is what answers a lien that arose before the purchase and was not known at the time.
08
What if there is an easement across the yard that nobody mentioned?
Three access problems sit on the covered list. The first is an undisclosed or unrecorded easement that is not otherwise apparent on the land. The second is having no right of access to and from the land. The third is an undisclosed restrictive covenant affecting the property. A driveway crossing a neighbor's land on a handshake is the common version.
What a strong answer sounds like
A good answer walks the real access route and compares it to the survey. Access and easements are both on the Department's covered list, and T. Kerr Property Group serves Georgetown, Round Rock and Liberty Hill, where its work includes acreage homesites. A buyer should hear that no right of access is a named covered defect.
Red flag
An answer that the easements are all on the plat is not the whole answer. The covered defect is the easement that was never disclosed or recorded and is not apparent on the ground. A restrictive covenant nobody mentioned sits on the same list.
09
Does title insurance cover a boundary dispute with a neighbor?
Title insurance does not protect against boundary disputes with a neighbor unless additional coverage is purchased. Schedule B item 2 of a Texas policy prints an exception. It covers discrepancies, conflicts or shortages in area or boundary lines, encroachments or protrusions, and overlapping improvements. Amending that exception narrows it to shortages in area only.
What a strong answer sounds like
A good answer quotes the pricing rule instead of guessing. Rate Rule R-16 sets the amendment at $0 on a loan policy. On a residential owner's policy it is 5 percent of the basic premium rate, with a $20 minimum. The company may accept an existing survey, whatever its age, with a Form T-47, as long as the survey is acceptable to the company.
Red flag
The most common wrong answer is that the owner's policy already covers the boundary line. It does not, unamended. A demand for a seller indemnity is wrong too: a title insurance company may not require an indemnity from a seller, buyer, borrower or lender to provide this coverage. A buyer paying for the amendment should see it amended in writing.
This article is general information about the Central Texas market and is not legal, tax or financial advice. Statutes, rates, deadlines and district rules change. Confirm anything that affects a decision with a licensed attorney, a tax professional, the Williamson County Tax Assessor Collector or the Williamson Central Appraisal District before acting on it.
