We thought we’d provide a follow up to a previous post (https://bit.ly/2V89xpf) regarding title insurance and give you some examples how this cover has been effective in managing unknown risks for property purchasers.
Thanks to First Title Insurance for providing us with these real life cases.
Property fraudsters strike Perth
In 2011, The West Australian newspaper reported that Nigerian fraudsters sold a Western Australian family’s $400,000 Perth home without their consent while they were living overseas.2One year earlier, the newspaper reported a similar fraud, which saw another Perth home owner lose his investment property.3
In both instances, The West Australian stated that the victims were required to pursue the perpetrators and press criminal charges to obtain compensation. This is usually a long, protracted and highly stressful process that victims must pay for – and success isn’t guaranteed.
If the home owners mentioned in these news stories had a property risk insurance policy, they would have received comprehensive protection against the loss caused by the fraud.
The insurer will defend your interest in their property and pay all legal costs. If you are unable to recover your home, you may be indemnified for your loss, and have the value of the property paid out.
2 ‘Probe into alleged house sale scam’, Gabrielle Knowles and staff reporters, The West Australian, 10 August 2011
3 ‘Taskforce to probe alleged Nigerian scam’, Natasha Boddy, The West Australian, 11 August 2011
The sewage disaster
Purchasers moved into a newly renovated home in New South Wales. During the conveyancing process, they had asked the vendor to provide an up-to-date sewer and drainage diagram as an added precaution. The vendor supplied a diagram and claimed it was up-to-date. However, three months later they woke up one morning to find their backyard filled with sewage, which poured down their driveway. They immediately called a plumber, and their title insurer.
The insurer and covered the plumber’s remedial action, until the claim could be assessed. Investigations were unertaken as to whether a proper inspection had been carried out as the vendors had claimed. The investigations revealed that the sewer and drainage diagram was seven years old and did not include recent works carried out by the vendor.
A correct, updated diagram was submitted to Sydney Water and repair works were covered to ensure the new owners’ sewer and drainage passed a final inspection by Sydney Water. The claim amount was approximately $8,000.
Unapproved structures
A couple in New South Wales purchased title insurance when they bought their new home. Shortly after they moved in, they found their land flooded every time it rained. Eventually, they hired an engineer to inspect their retaining wall, which was approximately 20 years old.
The engineer discovered the retaining wall was built incorrectly and did not allow for drainage. Worse, the wall was built without council approval and did not comply with council requirements. The local council subsequently inspected the wall and issued a notice to the owners to demolish and rebuild it.
As soon as the council issued the notice on their retaining wall, the owners contacted their insurer. Council approval was obtained for a new retaining wall and quotes from local builders to demolish and rebuild it. All the associated costs were covered, including administration fees, materials and labour, saving the owners approximately $50,000.
If you have any questions about your situation, contact me via leah@stevensconveyancing.com.au or call 0414 894 031 to discuss.
Please note that the information contained in this article is of a general nature only and does not constitute legal advice. Stevens Conveyancing does not take responsibility for any errors or omissions obtained from the use of this information.