When joining the ownership of real estate, as well as during the possession of it, the owner is not immune to the danger of denouncement of his acquisition transaction due to the fact that the previous transactions had been closed with disabilities.
At the same time, in Russia there are no legal instruments by which the owner, even if it is a bona fide purchaser can recoup his/her losses resulting from loss of ownership of that property.
The only way protect yourself against such a situation is to enter into a contract of insurance against risks of loss of property rights, to call it conventionally, title insurance.
Another case when you may encounter title insurance, occurs if you take in a loan secured by real estate or land. One of the requirements of the bank in such case is insurance against the risk of loss of property ownership. The bank will be a beneficiary in this case, since it is interested and may also suffer from recognition of the transaction void and alienation of property from its ultimate owner.
In any case, in the contract of title insurance, only the owner of the property can holder the policy.
The insured amount corresponds to the actual value of the property, or the size of the loan if the piece of property is subject to a pledge.
When writing an insurance and determining the conditions of it, it is compulsory for the owner to provide copies of the certificate of title, contract of sale, evidence of the market price of the property, as well as papers that determine the nature of previous transactions (previous contract of sale, basis for change of ownership, prove of absence of court proceedings against the property, etc.). In addition, if it is impossible to determine the degree of risk by the submitted documents, the insurer will often insist on an independent legal review of purity of the last and previous transactions with the property.
In accordance with Russian legislation, the period of limitations in relation to acquisition of real estate is 3 years, therefore a title insurance contract is usually concluded for a period that does not exceed 3 years from the date of acquisition of property rights, if other requirements are not imposed by the Bank or other interested parties.
Insurance premium depends on the nature of the transaction, legal expertise results, on how long ago the ownership of the property was obtained, the term of insurance, and ranges from 0,2% to 0,5% of the sum insured per year of insurance.
If you have additional questions, or want to enter into a contract of title insurance with our company, our specialists will be glad to advise you.