Title Insurance in Michigan: What Novi Buyers Should Know

Buying in Novi and wondering if title insurance is worth it? You are not alone. Title issues can hide in public records and surface after you close, risking your equity and peace of mind. In this guide, you will learn what title insurance covers, how Michigan rules affect your closing, Novi-specific issues to watch, costs, endorsements, and a simple step-by-step timeline. Let’s dive in.

Title insurance basics

Title insurance protects you from financial loss if a covered defect in your home’s title existed before your policy date. This can include forged documents, undisclosed heirs, errors in public records, or hidden liens. It is different from homeowner’s insurance because it is a one-time purchase at closing and it covers past events that impact ownership, not future hazards like fire or flood.

There are two main policies. An owner’s policy is optional for you but strongly recommended because it protects your equity and legal defense costs, usually up to the purchase price. A lender’s policy is typically required by your mortgage lender and protects the lender up to the loan amount. It does not protect your equity.

Owner’s vs. lender’s policy

An owner’s policy follows you as long as you own the home, subject to policy terms. It pays covered claims and legal fees to defend your title if someone challenges your ownership. A lender’s policy protects only the lender’s interest. If a title problem arises, you would need your own owner’s policy to be covered.

Confirm in your purchase agreement who will order the title work and who will pay for the owner’s policy. In Oakland County, this is negotiable and driven by local custom and contract terms.

What’s covered and what’s not

Covered risks often include forged deeds, improperly executed documents, errors in recording or indexing, and recorded liens or judgments that were missed. Title insurers also defend covered claims.

Common exceptions are not covered unless you add specific endorsements. These can include easements and covenants shown in public records, encroachments not shown by a survey, zoning and land use matters, certain unrecorded rights, and some mineral rights. Your preliminary report lists exceptions so you can review and ask questions before closing.

Endorsements Novi buyers consider

Endorsements are add-ons that expand coverage for specific risks tied to the property type and location. In Novi, you might consider:

• Survey-related coverage if boundary lines, fences, or improvements near lot lines raise questions.
• Access or boundary endorsements if access points appear limited or unclear.
• Condominium or planned unit development endorsements for condo and HOA communities.

Availability and names vary by carrier and by state, so ask your title company or closing attorney which endorsements fit your property.

Michigan regulations and consumer protections

In Michigan, title insurance is overseen by the Department of Insurance and Financial Services. On the mortgage side, federal rules require lenders to provide accurate closing disclosures and to explain title insurance requirements and estimated costs. You can find consumer-friendly explanations of title insurance and closing disclosures from well-known national resources.

In practice, title work in Michigan can be handled by a title company or by an attorney who prepares a title opinion and coordinates curative work. Many closings are managed by title agents who coordinate escrow, documents, and recording. If your transaction is complex, you can ask for an attorney to attend and help with curative steps.

Novi and Oakland County title considerations

For Novi properties, the Oakland County Register of Deeds records deeds, mortgages, liens, easements, and related instruments. Title examiners rely on county records, and older documents sometimes contain gaps that require extra research.

Local issues you may see on a preliminary report include:

• Easements and rights-of-way for utilities, drainage, or roads, especially in suburban subdivisions.
• HOA or condominium covenants, restrictions, and assessments. Unpaid association dues can be an encumbrance.
• Unreleased mortgages or judgment liens that must be paid off and released before closing.
• Boundary disputes from legacy legal descriptions or improvements near lot lines. A current survey or endorsement can help.
• Contractor or mechanic’s liens from unpaid work.
• Rare environmental liens or local ordinances that impact marketability, although most environmental risks are not covered by title insurance.

Title insurance costs and shopping smart

You pay a one-time premium at closing. For an owner’s policy, the premium is based on the purchase price. For a lender’s policy, it is based on the loan amount. Endorsements add to the premium. States differ in how rates are set, so confirm your exact costs with your title agent. Expect fees to vary with the property price and policy choices.

Beyond premiums, your closing may include escrow or settlement fees, county recording fees, transfer taxes if applicable, payoff amounts for seller liens, and prorated taxes or HOA dues. Your lender must give you a Closing Disclosure that details final line items at least three business days before closing.

When comparing title providers, ask about:

• Insurer financial strength ratings and claims handling.
• Local experience in Oakland County and Novi.
• Turnaround times for payoff and release work.
• Fees for escrow and closing services.

You can also check Michigan licensing and complaint information and review independent insurer ratings for a fuller picture.

The title timeline in Novi

Here is the typical sequence from contract to closing:

1. Purchase agreement. Once you are under contract, your agent or the designated title contact orders the title search.

2. Title search and preliminary report. The examiner checks county records for deeds, liens, easements, covenants, and other recorded items.

3. Review and curative work. The title company or closing attorney clears defects by obtaining payoffs, releases, and affidavits as needed.

4. Closing and recording. You sign documents, funds are disbursed, the deed and mortgage are recorded, and owner and lender policies are issued or finalized once recording is confirmed.

5. Post-closing. Your policy documents are issued to you and your lender after recording.

In a routine transaction, this process often takes a few weeks. Curative issues can add time, so order title work as soon as the purchase agreement is signed.

What to expect at closing

If you are financing, you will receive a Closing Disclosure with final numbers at least three business days before closing. At the table, you will sign the deed, mortgage and note if applicable, and required affidavits and settlement statements. The deed is recorded with the county after funding. Title policies are finalized and issued shortly after recording.

Red flags in a preliminary report

As you review your preliminary report, look for:

• Unreleased mortgages or home equity lines.
• Tax or judgment liens.
• Multiple owners, marital signatures, or estates that may require extra paperwork.
• Easements that limit building or use.
• Ambiguous or outdated legal descriptions.
• HOA or condo declaration issues, including unpaid assessments.

Ask the title agent to explain each exception. Clarify what will be cleared, what will remain as an exception, and whether an endorsement can improve coverage.

If a problem surfaces after closing

If you find a title issue after closing, contact your title insurance company right away. Owner’s policies cover claims arising from defects that existed at the policy date, subject to policy terms and exceptions. The insurer has obligations to defend covered claims and resolve them according to the policy.

Quick checklist for Novi buyers

• Confirm who orders title work and who pays for the owner’s policy. Put it in your purchase agreement.
• Read your preliminary title report and ask about every exception.
• Consider endorsements that fit Novi properties, including survey, access, and condo or PUD endorsements.
• Verify the name of the insurer, ask about claims procedures, and check licensing and ratings.
• Confirm closing timelines and recording steps with your title professional, and keep copies of all closing documents and your policy when issued.

Buying in Novi is a smart move when you have clear title and the right protections in place. With a solid owner’s policy and a contract-smart team guiding your closing, you can protect your equity and move in with confidence. If you want a second set of eyes on your title questions or need recommendations for trusted local title providers, reach out to Five Star Luxury Realty for thoughtful, legally informed guidance.

FAQs

Do Novi homebuyers need an owner’s title policy?

• While optional, an owner’s policy is strongly recommended because it protects your equity and covers legal defense costs if a covered title defect arises. A lender’s policy does not protect you.

Who chooses and pays for title services in Oakland County?

• It is negotiable and often driven by local custom. Your purchase agreement should specify who selects the title company and who pays for the owner’s policy.

How long does the title process take in Michigan?

• In many cases, it takes a few weeks from title order to closing, but curative issues like lien releases or missing paperwork can extend the timeline. Order title work as soon as you sign the contract.

What endorsements make sense for Novi condos or HOAs?

• Ask about condominium or PUD endorsements for association-governed properties, and consider survey or access endorsements if boundaries or entry points are unclear.

What if a lien appears right before closing in Novi?

• The title company or closing attorney will work to obtain payoffs and releases to clear it before issuing the policy. If it cannot be cured, discuss options with your agent, lender, and title professional, including postponement or renegotiation.

How can I confirm a title insurer’s reliability in Michigan?

• Request the insurer’s name and check Michigan licensing and any complaint history. Also review independent financial strength ratings and ask about local claims handling experience.