Title Insurance in New Jersey Real Estate Transactions

Title insurance is a critical part of nearly every New Jersey real estate transaction. It protects against unknown title defects that may not appear in a title search, including forgeries, fraud, recording errors, missing heirs, unreleased liens, or improper conveyances in the chain of ownership.

Most buyers are surprised to learn that there are two different types of title insurance policies issued at closing — a lender’s policy and an owner’s policy — and they do not provide the same protection.

Lender’s Title Insurance Policy

A lender’s title insurance policy is required by virtually every mortgage lender. This policy protects only the lender’s financial interest in the property up to the amount of the loan. If a title problem arises after closing, the lender is protected — not the buyer.

The lender’s policy ends when the mortgage is paid off and does not provide any continuing protection to the homeowner.

Owner’s Title Insurance Policy

An owner’s title insurance policy protects the buyer’s ownership rights for as long as they own the property. If a title defect surfaces years after closing — such as an undisclosed lien, boundary issue, or ownership dispute — the owner’s policy covers legal defense costs and financial loss.

Unlike the lender’s policy, the owner’s policy remains in effect even after the mortgage is satisfied.

Why Title Insurance Matters in Real Estate Contracts

Title issues can delay or prevent a real estate closing, and problems discovered after closing can be expensive and legally complex to resolve. Title insurance works together with the protections established during attorney review and the title examination process to ensure that the buyer receives clear, marketable ownership.

For a practical explanation of common title problems that delay or prevent closings, see Title Issues in New Jersey Real Estate Transactions.

Speak With a Real Estate Attorney About Title Protection

Our office in River Vale assists buyers and sellers throughout Bergen County and Northern New Jersey with reviewing title searches, addressing title defects, and ensuring proper title insurance coverage as part of a comprehensive real estate transaction strategy.

If you have questions about title insurance, title searches, or protecting your ownership rights, contact The Law Office of Joseph A. DiPiazza at (201) 494-2800 or reach out online to schedule a consultation.