Title Defect Indemnity Agreement

Title Defect Indemnity Agreement

A Title Defect Indemnity Agreement is a legal contract designed to protect one party from potential losses or claims arising from defects or issues related to the title of a property. This type of agreement is particularly important in real estate transactions, where the ownership rights of a property can be contested due to various reasons, such as unresolved liens, encroachments, or discrepancies in property descriptions.

In a Title Defect Indemnity Agreement, one party (typically the seller or current owner) agrees to indemnify and hold harmless the other party (usually the buyer) against any future claims, damages, or legal costs that may arise due to a defect in the title. This ensures that if a title issue surfaces after the sale is completed, the buyer can seek compensation for losses directly from the seller.

For example, if a buyer purchases a property but later discovers an undisclosed lien on the title, which could potentially affect their ownership, the Title Defect Indemnity Agreement allows the buyer to claim damages from the seller for any costs incurred in resolving the lien.

These agreements often include details about the types of defects covered, the process for making a claim, and the timeframe within which the indemnity applies. By incorporating a Title Defect Indemnity Agreement into a real estate transaction, parties can mitigate risks associated with title issues and ensure more secure property ownership.