What does owner's title insurance cover on a new Miami condo?

An owner's title policy insures that you own the unit described in the recorded declaration, free of liens and claims other than the ones the policy lists as exceptions, and it pays to defend or settle a covered claim up to the policy amount for as long as you or your heirs own the home. It does not insure the building's condition, the association's finances, the view or the developer's promises. On a new condominium the exceptions that matter are the declaration itself, the developer's construction financing, which must be released at closing, and construction liens that can still be recorded after the work is done. In Miami-Dade the buyer customarily pays for the owner's policy and the premium is set by the state, so the question is not the price but the exceptions.

Two policies, two insured parties. The lender's policy protects the mortgage lender for the loan amount and expires when the loan is repaid; the lender requires it and the buyer pays for it. The owner's policy protects you for the purchase price and lasts as long as you own the home. A cash buyer gets no lender's policy and sometimes is told the owner's policy is optional. It is, in the sense that no one forces it; it is also the only paper that stands behind the deed. Where both are issued at the same closing the second is usually priced at a simultaneous issue rate, which is a question for the closing agent's estimate. Read what a Miami closing costs and cash or mortgage for Miami preconstruction.

Florida custom splits by county. In Miami-Dade and Broward the buyer customarily pays the owner's premium and, in a resale, chooses the agent. A developer's purchase agreement usually overrides custom: it names the closing agent, often a company related to the developer, and allocates the premium and the closing fees to the buyer. The contract says which; read it before assuming. The premium itself is a promulgated rate in Florida, set by the state's insurance regulator and the same whichever licensed agent issues the policy. What varies between agents is the settlement fee, the search and examination fees and the endorsements. A buyer who wants their own lawyer to review the commitment may do so whoever the closing agent is. Read documents before closing on a new Miami condo.

The commitment is the insurer's offer, issued before closing, and it has three parts. Schedule A says who will be insured, for how much, and describes the unit by its number and the recorded declaration. Schedule B-I lists the requirements the insurer sets before it will issue: the deed, the release of the developer's mortgage, the lien affidavits, the association's estoppel where one applies. Schedule B-II lists the exceptions, the matters the policy will not cover. On a new condominium the standard exceptions are the declaration of condominium and its amendments with everything they contain, recorded easements, taxes for the current year not yet due, and the general exception for matters a survey would show, which on a condominium is answered by the surveyor's certificate recorded with the declaration rather than by a lot survey. Each exception is a document the buyer may ask to read. A buyer who reads the declaration's exhibits finds the parking, the storage and the limited common elements described there, which is where the policy's description of what you own ends. Read the five sections of the condominium documents.

The construction loan. The developer built the tower with a lender whose mortgage covers the whole property. At your closing that lender releases your unit from its mortgage, usually by a partial release recorded with your deed. The requirement sits in Schedule B-I and the closing agent handles it; the buyer confirms it was recorded by asking for the recorded release after closing, with the deed.

Construction liens. Under Florida's construction lien law a contractor or supplier who is not paid may record a claim of lien for a period after their last work, and a lien recorded after your closing can relate back to the start of the work. The closing agent collects the contractor's final affidavit and lien releases, and the title insurer either removes the mechanics' lien exception or covers it. The buyer asks the closing agent, in writing, whether the policy will carry a construction lien exception and, if so, what it means. Read what happens if a Miami developer delivers late for how delivery and closing dates interact.

Two endorsements are usual on a condominium: the condominium endorsement, which insures that the unit is validly created under the statute and that assessments are not a prior lien at closing, and the restrictions endorsement, which covers loss from violations of the recorded restrictions. Ask the closing agent which are included in the quote and which cost extra. The gap is the time between the commitment's effective date and the recording of your deed; in Florida the closing agent typically provides gap coverage so that a lien recorded in those days is the insurer's problem, not yours. A claim is made in writing to the insurer named on the policy, not to the agent, and the policy sets how. Keep the policy with the recorded deed in the ownership file. Read the ownership file for a Brickell condo and the building notes on how to take title at Cipriani and at 619 Brickell by Nobu, because the name on Schedule A is the name on the deed, and that decision, personal, trust or entity, is made before the commitment is ordered. Read LLC, trust or personal name. The desk reads the commitment's exceptions with the buyer before the closing statement is signed.