Title Insurance

[AgelessTravel]

Is title insurance necessary when purchasing a timeshare for $160? Does the insurance only protect the purchase price of the timeshare? The seller guarantees clear title to every timeshare they sell, how do I confirm the title is clear?

If there is an outstanding loan or lien etc. would the reseller be able to transfer the timehshare? How do I guarantee I will not be liable for any outstanding liens against the previous owner?

 

[vacationtime1]

Is title insurance necessary when purchasing a timeshare for $160? No

Does the insurance only protect the purchase price of the timeshare? Correct; that is the reason for my answer above.

The seller guarantees clear title to every timeshare they sell, how do I confirm the title is clear? You would have to do a title search which would cost almost as much as title insurance; not worth it on a $160 purchase.

If there is an outstanding loan or lien etc. would the reseller be able to transfer the timeshare? Yes; you would take subject to the lien

How do I guarantee I will not be liable for any outstanding liens against the previous owner? Get an estoppel certificate from the HOA or manager (not from the seller).

See my answers interlineated above. The bottom line is on a cheap purchase, you can afford to take title risks; the estoppel will inform you about unpaid MF's or assessments.

My own practice is not to buy title insurance on purchases of less than $10,000 or so -- and there are few timeshares worth $10,000 at this point.

 

[ronparise]

You ask "how do I confirm the title is clear?"

You dont, there is no guarantee. . Title insurance is just that; insurance. Car Insurance doesnt guarantee that you wont wreck your car, Health Insurance doesnt guarantee that you wont get sick and life insurance doesnt quarantee that you will live forever

Title insurance doesnt guarantee clear title. Its there to pay off and/or protect you if the title isnt clear.

If the premium paid is more than the potential loss I question the value

 

[AgelessTravel]

See my answers interlineated above. The bottom line is on a cheap purchase, you can afford to take title risks; the estoppel will inform you about unpaid MF's or assessments.

My own practice is not to buy title insurance on purchases of less than $10,000 or so -- and there are few timeshares worth $10,000 at this point.

I thought only the owner can request an estoppel letter? Can the closing company also request this on my behalf. The closing company is Resort Closing Inc. I've left a message with the resort, hopefully they will get back to me.

 

[AgelessTravel]

Just heard back from the resort, they will not release the information with the current owner's permission.

 

[TUGBrian]

http://tug2.net/timeshare_advice/what_is_timeshare_title_insurance.html

 

[vacationtime1]

Just heard back from the resort, they will not release the information with the current owner's permission.

Some resorts (e.g. Starwood) will only release an estoppel to an escrow company. There is no legal basis for this.

But if the seller refuses to authorize the release of an estoppel, I would stay away from the deal; I would assume the seller has something to hide.