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HOME BUYERS FAIR : Consumer Protection : Buyer Safeguards Can Protect Home Purchases : Home Buying: Title insurance, inspections and warranties are becoming increasingly popular not only as security for the buyer, but for the seller.

May 20, 1990|DAVID M. KINCHEN | TIMES STAFF WRITER

Issuance of a title policy means that a thorough examination has been made of all public records affecting the property in question and that the owner has acquired ownership free from title defects of public record.

Title insurance policies typically cost less than 1% of the sale price of the house: On a house selling for $314,950, the charge for title insurance from Southern California Title Co., Van Nuys, was $966.52, with the buyer paying $293.12 and the seller paying $673.40.

There is no uniform method of determining who pays what, according to the California Land Title Assn.: In some counties, the seller pays for the lender's policy and the buyer pays for the owner's policy; in other counties the seller pays the entire title insurance premium; in others, the buyer pays.

Southern California practice typically has a standard or owner's coverage (CLTA, short for California Land Title Assn.) paid by the seller and extended or lender's coverage (ALTA, short for American Land Title Assn.), required by the lender and paid for by the borrower, according to Chuck Riggs of Southern California Title Co.

CLTA policies cover most matters disclosed by public records, certain off-record risks, such as forgery, or incompetence of parties. It doesn't cover matters not disclosed by public records, certain mining and water claims, zoning and other governmental ordinances concerning the use of the property and defects known to the insured before the property was purchased and not disclosed to the title company before the sale.

ALTA title policies include everything covered under CLTA, plus unperfected mechanic's liens, unrecorded physical easements, facts a correct survey would show, certain water claims and rights of parties in possession, including tenants and owners under unrecorded instruments.

There are 13 title insurers licensed by the state Department of Insurance, along with 110 underwritten title insurance companies that act as agents of the licensed insurers. In most cases, the broker in a transaction picks the title insurance company.

RESOURCES

American Society of Home Inspectors, 3299 K St., N.W., Washington, D.C. 20007, (202) 842-3096.

California Real Estate Inspection Assn., 1100 N. St., Suite 5D, Sacramento, Calif. 95814, (916) 443-1422.

Home Warranty Assn. of California, P.O. Box 4020, Woodland Hills, Calif. 91365; (800) 992-3400.

National Home Warranty Assn., 6365 Taft St., Suite 2000, P.O. Box 9200, Hollywood, Fla. 33084; (800) 327-9787.

Pest Control Operators of California, 3031 Beacon Blvd., West Sacramento, Calif. 95691; (916) 372-4363.

Structural Pest Control Board, licensing department, Sacramento, (916) 924-2294.

California Land Title Assn., P.O. Box 13968, Sacramento, Calif. 95853; (916) 444-2647.

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