When it comes to Florida title insurance there are many different add-ons you can include for additional protections. These are known as title endorsements, and for a modest title endorsement fee, your insurance goes beyond the basics to cover various details more directly related to your specific property’s vulnerabilities.
In addition to Florida’s unique land concerns for ocean-adjacent homes, its aggressive land development industry spawns a tremendous amount of re-development, rezoning, re-subdividing and re-building that can change the rules for homeowners, post-purchase. For these reasons, prudent real estate investors often safeguard their real property assets with appropriate insurance add-ons.
Here’s what you need to know about title endorsements, what you can expect to pay, and how to choose the right endorsements for your Florida property purchase.
What Is a Title Endorsement?
Title endorsements add coverage beyond the homebuyer’s standard insurance policy by modifying some exceptions or adding property-specific coverage to the policy. A title endorsement covers things like encroachments, easements, access, and mineral rights. Title endorsements exist for both the homebuyer and the lender and are often purchased together.
Types of Endorsements.
There are about 100 types of real estate title endorsements available to both homeowners and lenders, and you can pick and choose the endorsements that are most applicable to your particular property and it’s community. Here are a few most commonly used in Florida
Access and Entry: The access and entry endorsement helps ensure that the new homeowner has either direct or indirect access from the property to a public street. This can happen in cases where the property does not border a public road and an easement is required from a neighboring property to reach that road.
Zoning: The zoning endorsement helps protect the homeowner from loss or damage caused by a court order forcing them to either alter or remove the home or prohibiting them from using the home for a specific purpose because it violates a zoning law.
Continguity: This endorsement is for property made up of multiple parcels of land that are adjacent, or contiguous, to each other. It ensures that there are no other parcels or gaps between parcels that cause them to be detached from one another. It covers any loss that occurs due to the insured parcels not touching one another. This is important if a buyer is scooping up several adjoining beachfront or Intracoastal lots to make one large parcel of property for development purposes, for example.
Easements, Encroachments, and Minerals: This three-in-one endorsement protects against loss and damage in the case of an easement or encroachment violation resulting in the alteration or removal of some of the homeowner’s property. If you must tear down a fence that crosses into a neighbor’s yard, for example. The minerals endorsement covers loss or damage if someone owns the minerals beneath your land and wants to extract them. If someone wanted to extract oil, for example, this entitlement would cover any loss or damages caused by the extraction process.
Survey Coverage: This protects the homeowner from damages in cases where the land insured on the policy is not the same land identified on the survey. In Florida, a survey is not required for a condo purchase.
Florida Navigational Servitude: If the home you intend to purchase is on the waterfront, this endorsement compensates the homeowner for loss or damage in the event the federal government must dredge the land or remove docks or marinas to make the adjacent waterway more navigable for commerce. Ironically, this coverage can only be granted in areas where such alterations will not be likely, such as if the property is located along the shores of the Atlantic Ocean or Gulf of Mexico far away from an existing channel or inlet.
Environmental Protection Lien: This endorsement ensures there are no liens on the property for the cleanup of hazardous waste.
Who Pays for Them?
If you are a first-time homebuyer in the state of Florida, you have probably heard that you have to pay for your owner’s title insurance policy as well as your lender’s policy. You may have also heard that this is the seller’s responsibility. So, which one is correct?
The answer is—it depends, hence the confusion. Both answers are technically correct, depending on the county in which the home you wish to purchase is located. The seller usually pays for the title insurance in the following Florida counties: Palm Beach, Hillsborough, Osceola, and Orange. Whereas in Collier, Sarasota, Broward, and Miami-Dade counties the buyer typically pays.
Keep in mind that this isn’t a law, and there are no hard and fast rules regarding who pays. You can always negotiate by asking the seller to pay some or all title endorsement fees.
How Much Do These Title Endorsements Cost?
Title endorsements are inexpensive, especially when you consider the fact that they are paid for only once at closing and protect you for as long as you own that property. In Florida, many of these endorsements are a flat $25, while others are calculated at 10% of the insurance rate. The rate for title insurance in Florida is around 0.5% of the purchase price of the property.
If you are applying for a mortgage, your lender will require you to purchase the same endorsements for them as you are getting for yourself. These fees are due at closing.
If all of this sounds a bit overwhelming, your Florida real estate lawyer can walk you through the land concerns most relevant to your potential sale or purchase and provide the direction you need to help you make confident decisions.
Additionally, the Rabideau Klein firm offers a free, easy-to-use title insurance calculator to work through your fees and show what you will need to pay for your specific endorsements.
David E. Klein, Esq. and Guy Rabideau at Rabideauklein.com are among a select group of attorneys Florida Bar Board Certified in Real Estate Law. They have the expertise and experience you need to ensure that your interests are protected throughout your real estate transactions. Contact Rabideau Klein to discuss the legal implications of your next Florida property transaction.