3 Title Insurance Traps in Siesta Key
Beware of Title Insurance Traps in Siesta Key
Quick Answer
Title insurance traps in Siesta Key can derail your real estate deal if not addressed early. Florida’s Office of Insurance Regulation oversees title insurance, and any oversight can lead to significant financial exposure. For instance, a buyer discovered an unrecorded lien on the property just days before closing, causing a delay and additional legal costs. If such issues are found late, you might face closing delays or even lose your deposit. Call me at 941.400.8735 or reach out directly to Michael Renick – I’ll share my approach with you.
What Actually Breaks Deals in Florida
Unrecorded Liens and Encumbrances
The problem arises when a title search misses unrecorded liens or encumbrances, which can surface unexpectedly. Florida Statute 627 governs title insurance, but if the title company fails to catch these issues, the buyer is at risk. In one transaction, a lien was discovered during the final title review, forcing the buyer to negotiate with the lienholder or risk losing the property. The consequence was a delayed closing and additional legal fees, which could have been avoided with thorough due diligence.
We recently purchased a condo on LBK. Eric is the reason. We were looking for several years. Eric is extremely knowledgable, professional, patient, kind, and most importantly, honest. As an example, his always gave his honest opinion of the price/value of a property instead of just supporting the list price in order to make a sale.
– Cynthia Tessler, Zillow Review
Condo Association Approvals
Condo association approvals can be a hidden trap, especially in Siesta Key‘s older condo stock. Florida Statute 718 requires condo associations to approve new buyers, but this process can be slow and unpredictable. In one case, a buyer’s application was stalled due to pending association board elections, leading to a missed closing date and potential contract termination. The delay not only jeopardized the deal but also put the buyer’s deposit at risk.
Insurance Binding Failures
Insurance binding is critical, especially on barrier islands like Siesta Key, where coastal risks are high. The Office of Insurance Regulation mandates certain coverage levels, but securing a binder can be tricky. I’ve seen deals fall apart when a buyer couldn’t secure insurance binding due to last-minute underwriting changes, leaving them unable to close. The result was a lost opportunity and potential financial loss if the deposit was non-refundable.
Where It Usually Blows Up
These issues typically surface during the final stages of the transaction, often just before closing. This timing is brutal because buyers and sellers have already invested significant time and money into the deal. When problems like unrecorded liens or insurance binding failures emerge late, buyers can lose their deposits, face legal battles, or have to renegotiate terms under pressure.
What I Tell Clients Before They Risk Money
- Conduct a Thorough Title Search: Ensure your title company performs a comprehensive search to catch any hidden liens or encumbrances.
- Verify Condo Association Requirements: Understand the approval process and timeline for any condo associations involved in your transaction.
- Secure Insurance Early: Begin the insurance binding process as soon as possible to avoid last-minute underwriting surprises.
- Review All Documents Carefully: Pay close attention to all documents, especially those related to title and insurance, to catch potential issues early.
- Have a Contingency Plan: Prepare for potential delays or renegotiations by having a backup plan in place.
Let’s continue this conversation.
Call me at 941.400.8735 or schedule a 15-minute call. I’ll tell you what I would look for.
Call 941.400.8735 or Schedule a Call
Questions Clients Actually Ask
What happens if a lien is discovered after closing?
If a lien is discovered after closing, the title insurance policy should cover the cost of resolving it, but this can still lead to legal battles and stress. It’s crucial to ensure a thorough title search is conducted to prevent this scenario.
We could not have been more pleased with Eric Teoh and Mike Renick during our search and recent purchase of our home on Longboat Key. These guys are a breath of fresh air in today’s business environment operating with “old school” business practices Should we require a realtor in the future we would certainly engage them again. Len & Ann Cincinnati, Ohio
– zuser20170122200015417, Zillow Review
How can condo association delays affect my deal?
Condo association delays can lead to missed closing dates, putting your deposit at risk and potentially terminating the contract. Understanding the association’s approval process and timeline is essential to avoid these pitfalls.
What To Do Right Now
Engage a reputable title company and start the insurance binding process as early as possible. This proactive approach can help identify and mitigate potential issues before they become deal-breakers.
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Michael Renick · Licensed Florida Real Estate Broker
License #BK3241900 · Verify on Florida DBPR
Mangrove Realty Associates Inc / Team Renick · Serving Sarasota & Manatee Counties since 2011
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