Re­duc­ing your risk

Ti­tle in­sur­ance can cut the stress of buy­ing prop­erty, re­ports Giuseppe Tauriello.

The Advertiser - Real Estate - - House Hunter -

HAD Matthew and Tina Do­rian not been in­formed about a form of in­sur­ance pro­tect­ing them from risks as­so­ci­ated with prop­erty own­er­ship, they would not be liv­ing in their Seaton home.

Ms Do­rian says prop­erty risk in­sur­ance, oth­er­wise known as ti­tle in­sur­ance, clinched the deal for the fam­ily, re­liev­ing con­cerns about own­er­ships rights on their prop­erty.

‘‘We sold a house about a year ago and while we were go­ing through that set­tle­ment process we found an­other house but had some con­cerns about an ease­ment run­ning along the boundary,’’ Ms Do­rian says. ‘‘That was when we were told about ti­tle in­sur­ance. The in­sur­ance will cover us for any re­pairs should the coun­cil need to re­pair the ease­ment.’’

Prop­erty risk in­sur­ance pro­tects own­ers from is­sues in­clud­ing:

IL­LE­GAL or un­ap­proved struc­tures, such as per­go­las and car­ports, that could re­sult in an or­der to de­mol­ish or re­pair.

ZON­ING is­sues which pre­vent cer­tain uses.

OUT­STAND­ING rates, taxes or levies for which the new owner be­comes li­able.

FRAUD or forgery re­sult­ing in a chal­lenge to own­er­ship of a prop­erty.

EN­CROACH­MENTS where a gar­den shed or fence en­croaches on an ad­join­ing prop­erty.

Ac­cord­ing to Con­veyanc­ing Mat­ters mar­ket­ing man­ager Penny Er­sk­ine, prop­erty risk in­sur­ance is dif­fer­ent from most other forms of in­sur­ance as it can pro­vide known risk pro­tec­tion as well as cov­er­age against un­known risks.

‘‘Dur­ing the process of buy­ing a prop­erty, you or your con­veyancer may be­come aware of an ex­ist­ing or po­ten­tial is­sue re­lated to that prop­erty,’’ she says. ‘‘With­out prop­erty risk in­sur­ance, the pur­chaser has limited op­tions - ei­ther ne­go­ti­ate a dis­counted pur­chase price or pull out of the con­tract. But with prop­erty risk in­sur­ance, the pur­chaser can sim­ply take out a pol­icy giv­ing them pro­tec­tion against that risk should it cause a loss down the track.’’

Ms Er­sk­ine says prop­erty risk in­sur­ance is some­thing to which buy­ers of older prop­er­ties should pay at­ten­tion, given the higher risk of prop­erty boundaries mov­ing over time or build­ing work hav­ing been com­pleted with­out re­quired ap­provals.

Sta­tis­tics from Archi­cen­tre pre­pur­chase home in­spec­tions show 44 per cent of weath­er­board homes, 32 per cent of brick-ve­neer homes and 38 per cent of dou­ble-brick homes in­cor­po­rate il­le­gal build­ing works.

First Ti­tle gen­eral man­ager Christopher Walker says prop­erty risk in­sur­ance pro­vides cov­er­age be­yond the life of own­er­ship.

‘‘This means that even af­ter you sell the prop­erty, you are in­sured should there be a later claim,’’ he says.

Picture: DAVID CRONIN

PEACE OF MIND: Tina and Matt Do­rian with son Lach­lan at their Seaton home.

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