Wednesday, April 23, 2008

Real Estate in Jamaica - Title Insurance

There has been quite a bit of excitement in the real estate industry lately with talk about the introduction of title insurance by NEM insurance company. You will recall my earlier post about the complicated and bureaucratic experience inherent in transactions in the Jamaican real estate market.

Take a look again at my description of the structure of our land ownership system which comprises the Torrens title system and the common law title. In the case of the former, the land title is registered and this means among other things that it is guaranteed by the government of Jamaica. Demonstrating ownership to common law title/unregistered land is less certain however and depends on proof of an unbroken chain of title back to a good root of title.

The idea of title insurance is to combat the defects in the systems by providing protection against loss. Whereas registered title has lots of advantages the process of obtaining same can be very time consuming and even confusing whether it is applying to register splinter titles in a new subdivision or just transferring ownership in one title. With the introduction of title insurance financial institutions will be offered the security they need to make loans allowing land developers access to mortgage financing without the actual perfected title.

In the case of owners of common law title, if their titles are covered by title insurance, they will also have access to financing as, as they would now be able to get mortgage loans.

Indeed Jamaica National Building Society's general manager Earl Jarrett has said that they will accept NEM's title insurance policy. We look forward to the anticipated benefits that are to flow from this intiative.