When you acquire property from a seller and simultaneously sell it to a third-party buyer, as a briefly intervening title holder, you may think you don’t need an owner’s title insurance policy. After all, you’re only holding onto the property for a few seconds and not even taking possession of it. So, what’s your risk if an eventual title issue arises?
Even if you own the property for only a few seconds, hours, or days, you’re entering the “chain of title,” or the ownership record. If any title issues arise later, you could be dragged into legal disputes. Some problems are not discoverable through a standard title search, and don’t surface until later:
- Errors in the public records
- Forged documents
- Omitted signers required for effective transfer from an LLC or other entity
- Undisclosed purchase agreements or other contracts
- Undisclosed heirs
As long as the end buyer has an owner’s title insurance policy, they can fi
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