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Title Insurance for Cooperatives, Eagle 9, New York

First American Title Insurance Company is offering a product called Eagle 9, which is akin to title insurance for real property. Typically, purchasers of a co-op obtain a lien search to determine whether there are any liens against the owner, or UCC’s filed by a bank to secure a loan against the unit or building. In most cases, no further title insurance is purchased by the purchaser, and if any problems arise with respect to title or liens, there will be no insurance protection. Prior to Eagle 9 and currently, a TIRSA endorsement has been available (title insurance for co-ops), which was probably thought too expensive and not worth purchasing.

An Eagle 9 policy is relatively inexpensive for the coverage it provides. It provides coverage should it turn out that the purchaser does not have proper ownership, if a prior owner comes out of the woodwork and proves he still owns the co-op. It protects against federal tax liens that won’t be found by a typical search (because they could be filed out of state); against liens that arise between the gap of the search and the closing, and various other title problems that could be determined after the closing.

Considering the substantial investment that many make to purchase a co-op, the cost of the Eagle 9 policy, which is far less than title insurance for real property or the TIRSA endorsement, would be a worthwhile investment for peace of mind.

Cynthia M. Burke, http://www.nyrealtylaw.com

Categories: Real Estate Law