Every so often, I get a question about title insurance in Florida and it usually comes from somebody selling a home. Recently, I received such a question so I thought I would use it to remind everybody of “how it all works” in the Sunshine State.
Jim K. of St. Petersburg asked:
I am hopefully selling my home in St. Petersburg, FL. Why is the title company charging me (the seller) title insurance. I paid it when I bought the home 4 years ago. Is this required for me to pay?
I see this so often and remember the shortest answer to the question of “who pays for title insurance in Florida?” is “it depends on what the contract says.” Title insurance in Florida is required by the lender (and should be purchased to protect the Buyer under all circumstances), but can be paid by either party in the real estate transaction.
When the Seller signs a Warranty Deed, he is warranting that he owns it and further is agreeing to defend title if it is not clear, but Florida law does not require the Seller to purchase an insurance policy to prove it. Many areas of the State have local customs where the Seller pays for a title policy as part of the “normal” way of doing business, but the fact is, the payment of the policy is negotiable. From what I can tell, it appears customary in South Florida for Sellers to pay for it, but in North Florida, the cost is born by the buyer (we do it right :)). In Central Floria, it can go either way.
Regardless of what anybody believes is customary or “normal,” the fact is the payment of title insurance in Florida is negotiable and should be addressed in the real estate contract. My advice to Jim was to read through his contract and see what he agreed to do.