Title Indemnity Agreement
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Title Indemnity Agreement

Title Indemnity Agreement

Title Indemnity Agreement Explained: What It Is and Why You Need It

When it comes to real estate transactions, ensuring that you have a clear and marketable title is essential. However, there are times when a title defect can arise even after a thorough title search has been conducted. In such cases, a title indemnity agreement can help protect the buyer from financial losses resulting from title defects.

So, what exactly is a title indemnity agreement?

A title indemnity agreement is a legal document that helps protect a buyer from losses due to any title defects that may arise post-closing. The agreement typically involves the seller agreeing to indemnify the buyer against any losses resulting from a title claim that arises from undisclosed or unknown defects. Simply put, if an issue with the ownership of the property arises after closing, the seller will bear the financial responsibility of resolving it.

Why is a title indemnity agreement important?

One of the most significant benefits of a title indemnity agreement is that it provides buyers with an added layer of protection against potential risks associated with title defects. If a buyer finds themselves in a situation where they are responsible for resolving a title issue, the costs can be substantial. With a title indemnity agreement, the seller agrees to assume responsibility for any expenses associated with correcting the issue. This provides buyers with peace of mind, knowing that they won`t be left to shoulder the financial burden alone.

Another essential aspect of a title indemnity agreement is that it can help streamline the closing process. When both parties agree to the terms of the agreement, it can help ensure that the transaction moves forward without any delays or unexpected surprises. The agreement also provides clarity around who is responsible for addressing any title issues that may arise down the line, which can help prevent confusion and potential conflicts between the buyer and seller.

Who typically pays for a title indemnity agreement?

In most cases, the seller is responsible for paying for the title insurance policy that is required for a sale to close. However, the cost of a title indemnity agreement may be negotiated between the buyer and seller. Depending on the circumstances, either party may agree to assume the cost of the agreement.


In summary, a title indemnity agreement is a legal document that provides protection to the buyer in the event of a title defect arising after closing. The agreement is an added layer of protection that can help buyers avoid substantial financial losses associated with resolving title issues. If you are considering buying a property, it`s essential to understand the importance of a title indemnity agreement and work with a qualified real estate professional to help you navigate the closing process.

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