When buying residential real property in Texas, purchasing an Owner’s Policy of Title Insurance (Owner’s Policy) protects for what is most people’s largest life investment. The following is a brief description of one of the least expensive and best ways to be sure and improve the coverage of this Title Insurance Policy. A requirement under virtually every purchase contract is that the designated title company provide the parties a Commitment for Title Insurance which lists among many things, items which are exceptions or not included in coverage of the policy.
Two additional coverages I advise every client to obtain relate to the property survey. This is the “map” that depicts the property lines, easements, structures, encroachments, just to name a few of the items included.
First, the Amendment of Exception to Area and Boundaries addresses the standard exception language in a Title Commitment that states “Any discrepancies, conflicts, or shortages in area or boundary lines, or any encroachments or protrusions, or any overlapping of improvements.” This means that claims made relating to these items are not covered under the policy.
Therefore, the purchase of coverage to amend this to describe “Shortages in area” you will be insured for loss, costs, and attorney’s fees and expenses resulting from discrepancies, conflicts in boundary lines, encroachment, protrusions or overlapping of improvements not shown on your survey and not known at the time of closing. In my opinion this is mandatory to purchase to protect your investment, large or small.
Further coverage may be obtained through what I also consider mandatory coverage. This is achieved through the purchase of the T–19 endorsement as to Restrictions, Encroachments, Minerals. You may view the specific endorsement by following this helpful link.
If you purchase this enhanced coverage the endorsement shown in the T–19.1 link below will be attached to, and become part of your Residential Owner’s Policy. Please read the endorsement for the best understanding of the coverage. Here’s the link: T–19.1 – Restrictions, Encroachments, Minerals Endorsement.
Unless specifically deleted from the endorsement (which is disclosed in the Title Commitment) the T-19.1 endorsement provides additional coverage for “Restrictions” described as unknown violations of enforceable restrictive covenants existing as of the date of the Policy; “Encroachments” described as encroachments of your improvements onto neighboring land or your neighbor’s improvements encroaching onto your land not depicted or described on the survey; “Minerals” described as certain damages to the surface estate resulting from the extraction or development of the mineral estate.
All of the additional coverages described here are valid, along with your Owner’s Title Insurance Policy, for as long as you or your heirs own the property. An approved survey of the property is required to obtain the additional coverages discussed here and this may also include the addition of additional exceptions to the Title Commitment.
Written by John A. Hay III, Managing Partner