If we observe America about 125 years ago when the gold rush was at its height and people would register their claims at a title registration office. This process saw the beginning of Title Insurance - claimants who registered were given a guarantee that they’d have a legal right to own and develop. Nowadays, in America no real estate transaction happens without Title Insurance.
With that in mind, Paul Boldy of Boldy Associates, began to introduce title insurance into Asia 4 years ago beginning in Hong Kong and Korea. Paul works with 2 of the world’s leading title insurance firms, Land American and Stewart title. Paul discovered that Title Insurance helps speed up the transaction for any buyer in any market but is especially useful in Asia with the main markets being China, India, Korea and Thailand.
“Asia has many issues regarding title systems. Here economies are relatively new… there is more risk however the rewards are greater. What Title Insurance does is it basically manages the risks.”
Paul defines Title Insurance as “… an indemnity given to a buyer.”
The way that Title Insurance works is that in the event of a claim the insurance company will follow and pursue the claim; pay any legal costs; if required they will sort the claim through litigation or in a worst case scenario even buy the property off the client so he is put back in the situation he was at the beginning - the insurance company will then sell it at a later date once the title issue has been resolved.
It should be noted that the service offered by a Title Insurance company is in addition to the due diligence carried out by your lawyer.
Paul clarifies: “We work very closely with lawyers. The lawyers do all the due diligence to look at the documentation to ensure it is fair and reasonable. If there is a problem at a later date the client would need to prove negligence on behalf of the lawyer and sue him. With Title Insurance we ask our client to instruct the lawyer to release the documents to us. We then review what the lawyer has done and if required ask for them to do a little bit more work. We actually insure the lawyers work as well."
We’ve discussed how relevant Title Insurance is for Asia, when examining Insurance with reference to Phuket and Koh Samui identifies instances of fraud and restrictions on rights of access as two concerns along with missing documentation.
Title Insurance covers things that a lawyer can’t - we will take the risk over documents signed under duress and we will take a risk on unidentified third parties who appear at a later date and stake a claim. We also take a risk on any rights of way that are not recorded and on any outstanding charges held against the property. Basically we cover off a whole host if things that the lawyers are not able to based on their search of the documents
Title Insurance will see both buyer and developer reaping the rewards. From the developers point of view it offers a cast iron fail-safe for the buyer. Paul has seen many Asian based developers starting to wrap Title Insurance in with their price as a major selling bonus in their bid to give their clients complete peace of mind.
If you dream of building your own home in paradise the service is available at a percentage based price through Boldy Associates: “Buyers building their own property can contact us direct or through their agents and we charge a fee based on a percentage of their property value. This price is a one off premium only, with the insurance cover lasting for the length of time they own the property. To give you an idea if you buy a property for 1 million US dollars you will attract a one-off fee of around USD 5,000
You can also rest assured with regards to the policy’s integrity as the policy issued is international and underwriters are covering the policy from either Houston, New York or London. The title insurance companies are all major US corporations, highly rated by the rating agencies.
With the worst case scenario of not having title insurance is not just the loss of the property, but if a court case follows then there will be legal fees and if you’re building a property then you will still have to pay the contractors whilst the work is put on hold, it is clear that this should not be an optional extra but a standard safety for all Thai property purchasers.