Possessory Title Financial Protection Through Indemnity Insurance
Indemnity insurance is a form of legal insurance that protects a buyer from certain defects in a title, whether it be a problem with the property or home. In the case of possessory title indemnity insurance, this financially protects land owners when they only have possessory title and risk losing their land. Possessory title indemnity insurance is also important for anyone purchasing land as it can protect them against any unforeseen circumstances should an owner with guaranteed possession try to take the land back.
When a piece of land is registered on the Land Registry it is given one of three titles - absolute, qualified or possessory. Possessory title is given when there isn't enough documentation or evidence to prove their claim to the land, but has exercised other rights such as adverse possession.
Adverse possession refers to someone who has claimed possession over the land other the land owner, such as a squatter. In normal cases, possessory title will be granted if someone has occupied the land for more than 12 years without a break in occupancy (i.e., giving an indication of wanting to give up the land such as moving out of a home on the land for a long period of time).
To obtain possessory title to a land 12 years must have passed and a further 12 years to claim absolute possession. If in this period of time someone else approaches and provides evidence for the land the current occupant may be forced to give up their claim. In this case, possessory title indemnity insurance can be taken out. This won't stop the actual, absolute owner from taking the land but will cover all financial costs associated with the land, such as losing your home, legal fees and hiring legal help if you take the case to court.
- Flickr: Monreith House