As a British subject, once in a while I find myself in the company of ex-compatriots – old neighbors (or as we’d write ‘neighbours’) and friends that might be here in the U.S. on holiday or business. I try hard to control myself from visibly rolling my eyes and taking a deep breath when the discussion invariably turns to my line of business. Blimey! Do I really have to explain what I do for a living?
I learned years ago that the concept of an industry specifically dedicated to insuring real estate title was — for the most part — foreign to those blokes on the other side of the pond (as well as in most of the world) until quite recently. Even now, their version of title insurance doesn’t resemble ours in the U.S. The title insurance industry in the U.S. dates back to the late 1800s and is part of the reason why the U.S. is considered to have the most efficient and safest land transfer system in the world. Indeed, it is one of the reasons why U.S. real estate continues to top of the list of desirable places in the world to purchase real estate by investors globally, according to AFIRE (Association of Foreign Investors in Real Estate). Still, trying to explain our process to my old pals – even with my best ‘American accent’ — usually either sends them quickly to noddyland or, even worse, to declare our industry ‘a piece of rubbish.’
Title Insurance in the United Kingdom
As necessity is indeed the mother of invention, off I went to Google to research just how transactions are dealt with for Her Majesty or any of her subjects wishing to buy or finance property in the United Kingdom. While I won’t bore the reader with details of the conveyance solicitor’s job or the mechanics of the completion (read: closing) process, there are concepts that — although similar to our process — one can only wonder if they will ever reach our shores.
For example, while Indemnity Insurance is the closest phrase resembling Title Insurance, each type of indemnity coverage requires its own policy. The most common type is a restrictive covenant policy. Other common types are coverage for lack of planning permission and/or building regulation consent. However, I couldn’t find coverage for issues in the chain of title or for any kind of liens that might be ahead of the new purchaser or mortgagee!
The saying goes that you can’t swing a cat in England without hitting a church. Well, that saying has gotten a little more serious in recent years. An obscure and ancient law is now being enforced whereby owners of certain properties are liable for the upkeep of a local church – no matter your beliefs! A recent case had a homeowner paying £230,000 to fund repairs to a local church. A “chancel search” can be ordered and indemnity insurance can be bought to cover against this possibility. Although I am not competent to speak about the separation of church and state that we have here in the US, I suspect perhaps U.S. lawmakers wouldn’t go for this kind of fee. Even more importantly for those of us in the title industry – this chancel search costs a little more than £15, not something worth making a mad dash for…
Next time I meet up with some of my chums from the old country, instead of telling them that I handle title insurance, perhaps I will tell them I help pay for church upkeep. That should move the conversation on even faster, won’t it?