Commonly Asked Questions About New Jersey Title Insurance
No. A one-time payment at closing is the only payment required for the life of the policy.
Title Insurance premiums are regulated by rating bureaus in each state, so the only decision is to choose a Standard Policy or an Enhanced Policy.
Required by most attorneys, the Enhanced Policy offers 28 additional benefits, including a free escalation in policy value and many important coverages continuing into the future. Critical fraud and forgery coverage are among these.
It depends on your state. Sometimes the buyer, sometimes the Seller and in some states, a combination of both parties.
With an Enhanced Policy, the value of total coverage automatically increases up to 150% of the original owner’s policy amount over 5 years.
It is your choice! For refinances, it can be at your home or one of our many closing locations. For purchase, it can be at the office of your realtor, your attorney, or any one of our convenient closing locations.
Yes. We have an in-house Legal Department that can do so for a fee. Please email us
The Foreign Investment in Real Property Tax Act (FIRPTA) is a provision of the Internal Revenue Code [Section 1445] which requires the buyer of real estate to withhold 10% of the ‘amount realized’ from the sale of the real property where the seller is a ‘foreign person.’
The Act places the responsibility to withhold the 10% on the buyer of real property or his agent. If he/she fails to withhold the proper amount, he/she may be held liable for the payment of the tax plus penalties and interest.
There are several exceptions to the 10% withholding requirement. The following two are most relevant to residential real estate closings:
- An individual buyer is acquiring real property for use as a residence and the ‘amount realized’ is $300,000 or less. The seller’s use of the property is not relevant. This exemption does not apply if the actual transferee (usually the grantee in the deed) is not an individual, even if the property is acquired for use by an individual. As proof of the exclusion from FIRPTA withholding, a buyer’s exemption affidavit setting forth the sales price and that the property is being acquired for residential use is necessary.
- The seller is not a ‘foreign person.’ Withholding will be exempted if the transferor furnishes a Non-Foreign Status Affidavit (NFSA) which sets forth the seller’s taxpayer identification number (i.e. social security number or identification number for business entity) and contains a statement that the transferor is not a ‘foreign person.’ The NFSA can be executed by a US citizen, a US green card holder, a proper corporate officer of a foreign corporation, a general partner of a foreign partnership or fiduciary of a foreign trust or estate. A transferee is not permitted to rely upon a NFSA if he or she has actual knowledge that it is false. He or she must then comply with FIRPTA withholding, unless another exemption applies.
The forms and instructions for FIRPTA withholding may be accessed on the Internal Revenue Service’s website – www.irs.gov – by choosing form number 8288.
What is the difference between a lender’s title insurance policy and owner’s title insurance policy?
A lender’s policy only covers your lender and its investment in your property; it does not protect you, the owner. Only an owner’s policy protects the owner from claims to or defects on the property.
Please visit The Division of Taxation Property Administration at
https://www.state.nj.us/treasury/taxation/lpt/localtax.shtml
The homeowner’s insurance website
https://www.state.nj.us/dobi/division_consumers/insurance/homeowner.htm offers
information on finding a carrier, who needs homeowner’s insurance and how to obtain flood
insurance if needed.
Some of the most common:
Judgments/Liens
Default Taxes
Forged Deeds
Forged Wills
Fraud
Incorrectly vested persons on Deeds
Reimbursement of mortgage payments (Mortgage payments that were not made due to
property being claimed by someone else)
Legal defense cost
Lenders may require the buyer to purchase Title Insurance. It is strongly suggested to obtain
title insurance which protects the buyer from title defects that may give someone else claim to
your property.
Title insurance is a one-time fee offering protection during the life of the loan or during the life
of ownership.
The point of the real estate transaction process when title is transferred from seller to buyer.