Need Title Insurance Policy If Any Dispute as to the Ownership of Disputed Property

Question: We live in a subdivision in south Scottsdale. We have had the same neighbors for more than 20 years, and we have always known that the concrete block wall between our two homes encroaches two feet onto our lot. Our neighbors are now selling their home. They want us to sign a warranty deed to this two feet based on a legal description from a surveyor, and a condition of title report from their title company. We previously told our neighbors that we would sign a quit claim deed, but our neighbors say that their title company requires a warranty deed. Should we sign this warranty deed?

Answer: First, before you sign anything, you should have your own surveyor confirm the legal description of the two-foot encroachment. Second, if you want to sign a warranty deed, and not a quit claim deed for the two-foot encroachment, you must get a title insurance policy, not just a condition of title report. Your neighbor should pay for the cost of this title insurance policy.

Note: Most title insurance companies offer a condition of title report which is significantly different and less expensive than a title insurance policy. If this condition of title report is wrong, e.g., misses a lien recorded against the two-foot encroachment, the title insurance company has no liability. Therefore, a condition of title report should only be used for general information about the property.

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