Buying in Three Springs and hearing about title insurance for the first time? You are not alone. It can feel like one more cost and one more document in a long process. The good news is that a little clarity goes a long way. In this guide, you will learn what title insurance does, how owner’s and lender’s policies differ, who typically pays in Three Springs, and how to read your title commitment with confidence. Let’s dive in.
What title insurance covers
Title insurance protects you from financial loss due to problems with a home’s title that existed before you bought it. Think of things like errors in public records, undisclosed liens, an old deed signed incorrectly, or a missing heir who later claims an interest. It is about ownership rights, not the physical condition of the home.
There are two common policies:
- Owner’s policy: Protects your ownership up to the purchase price. Coverage generally lasts as long as you own the home, and for your heirs per policy terms. It is optional, but strongly recommended because it protects your equity.
- Lender’s policy: Protects your lender up to the loan amount. This policy is usually required if you finance. It protects only the lender and ends when the loan is paid off.
You pay the title premium once at closing. The title company searches public records and issues a commitment that shows what must be cleared before closing and what items will be excluded from coverage.
Colorado and Three Springs specifics
Title insurance is regulated at the state level in Colorado. Premiums and many endorsements are based on filed rate schedules. Exact costs depend on your purchase price, loan amount, and the underwriter’s filed rates, so request a local quote from the title company handling your closing.
In La Plata County and the Three Springs area, pay close attention to:
- Mineral rights: Mineral and surface rights are sometimes split in Colorado. Recorded mineral reservations may grant access rights to others and will usually appear as exceptions on title. Review any reservations carefully.
- Water rights: Colorado treats water as a separate legal right. Ditch rights or adjudicated water rights may affect land use. Confirm details with local records if water rights are part of the deal.
- Easements and access: Utility, trail, conservation, and drainage easements are common in planned communities. Know where these run and how they affect building or fencing.
- CCRs and HOA matters: Three Springs is a master-planned community. Expect recorded covenants, architectural guidelines, and HOA or metro district rules. Ask for CCRs, fee schedules, and any estoppel or compliance letter.
- Mechanic’s liens for new construction: For new builds, contractor and supplier lien waivers matter. Confirm how the builder handles lien clearances and final payoffs.
- Taxes and assessments: Review county tax status and any special district assessments. Confirm how taxes will be prorated at closing.
Local records that often come into play include the La Plata County Clerk and Recorder, Assessor, and Treasurer offices, plus HOA or metro district contacts for Three Springs. Your title company and real estate advisor can help you gather and interpret these items.
How to read your title commitment
A title commitment follows a standard format. Here is how to skim it with purpose.
Schedule A: Core facts to verify
- Names of the proposed insureds and how you will hold title. Make sure spelling and vesting are correct.
- Legal description and parcel ID. It should match your contract and any survey or plat.
- Policy types and amounts. Owner’s amount typically equals the purchase price. Lender’s amount matches the loan amount.
- Effective date and time of the search. Anything recorded after this date may not show up until an update.
Schedule B-I: Requirements to clear
These are the steps the title company needs before issuing final policies. Common items include:
- Payoff of the seller’s mortgage or liens
- Recording the deed and other transfer documents
- Proof of paid property taxes and HOA dues
- Affidavits or statements from parties
- For new builds, contractor lien waivers and final permit closeouts
You want every required item accounted for in the closing package.
Schedule B-II: Exceptions you need to understand
Exceptions are items your policy will not cover. Typical examples include:
- Current and future property taxes not yet due
- Recorded easements, rights-of-way, and covenants
- Matters shown on the recorded subdivision plat
- Survey-related items if you do not obtain a survey or an ALTA survey endorsement
- Specific encumbrances that will remain unless cleared
In Three Springs, pay special attention to CCRs, utility or trail easements, any mineral reservations, and road or maintenance agreements. Some exceptions are normal and acceptable. If something concerns you, ask the title officer whether it can be removed, corrected, or covered by an endorsement.
Endorsements: Targeted protection
Endorsements add coverage for specific risks and typically add cost. Common options include:
- Survey or boundary endorsement
- Zoning endorsement
- Access endorsement
- Mechanic’s lien coverage tailored for new construction
Ask which endorsements make sense for your property and whether a current survey is required.
What exceptions really mean
Exceptions carve out coverage. If a recorded easement is listed as an exception, your policy will not protect you from losses caused by that easement. You can accept it, seek a release if appropriate, or in some cases add an endorsement. The right move depends on your plans for the property.
Who typically pays in Three Springs
Payment is a matter of local custom and contract negotiation. Here is what you can expect in La Plata County.
- Lender’s policy: Usually paid by the buyer, since the lender requires it for the loan.
- Owner’s policy on resale: It is common for the seller to pay the owner’s policy on standard resales in many Colorado markets. That said, it is not a universal rule. In a hot market, a seller may ask the buyer to pay. Always check the contract.
- New-builds: Builders set their own practices. Some include an owner’s policy as part of the package. Others ask the buyer to pay or cover only a basic policy. Confirm in writing and review how the builder handles mechanic’s lien waivers and final recordings.
Negotiation tips:
- Spell out in the contract who pays for the owner’s and lender’s policies and who selects the title company.
- Ask for an itemized fee quote, including endorsements, closing or escrow fees, recording fees, and any county charges.
- If the seller will not pay for the owner’s policy, consider purchasing your own at the full purchase price for long-term protection.
Quick checklists
Before you go under contract
- Ask about existing liens, known easements, CCRs, HOA and metro district fees, and any special assessments.
- Confirm whether the seller plans to pay for the owner’s policy on a resale, or what the builder covers on a new build.
- Request recent property tax history and HOA contact details.
During due diligence
- Obtain the preliminary title commitment quickly and review Schedules A and B.
- Verify the legal description and parcel ID. Match them to your contract and any survey.
- Review all exceptions for easements, CCRs, mineral reservations, and recorded encumbrances.
- Request the HOA or metro district documents and any estoppel letter.
- For new builds, require lien waivers and confirm permit closeouts or certificates of occupancy.
- Ask the title company about helpful endorsements and whether a current survey is recommended.
- Confirm the tax proration method and check for pending special assessments.
At closing
- Confirm who is paying each title premium and fee.
- Review final requirements and confirm that payoffs and releases are handled.
- For new builds, confirm builder lien releases and that final documents will be recorded.
- Leave with copies of your policies and endorsements.
After closing
- Store your owner’s policy and the title commitment. Keep them with your closing documents.
- If a title issue surfaces later, notify the title insurer promptly as outlined in the policy.
Sample scenarios
Resale home in Three Springs with a loan
The seller often pays for the owner’s policy, while you pay for the lender’s policy and any loan-related title fees. The commitment will list the seller’s mortgage payoff as a requirement to clear before closing. You review CCRs, easements, and taxes, then choose any endorsements you want.
New-construction townhome in Three Springs
The builder may include an owner’s policy or ask you to pay. You confirm in writing who pays, obtain CCRs and the recorded plat, and request contractor lien waivers. If you finance, your lender will require a lender’s policy for the permanent loan. You decide whether to order a survey or a survey endorsement for added protection.
Common mistakes to avoid
- Skipping an owner’s policy because the lender has one. The lender’s policy does not protect your equity.
- Not reading Schedule B exceptions. An overlooked easement or restriction can limit your plans.
- Assuming the builder handles all liens by default. Ask for lien waivers and escrow procedures in writing.
- Treating payment customs as fixed. Always negotiate and clarify who pays in the contract.
- Forgetting endorsements. In specific cases, a low-cost endorsement can prevent a big headache.
Final thoughts
Title insurance is one of the quieter parts of a closing, but it can protect you from costly surprises. In Three Springs, the details often come down to CCRs, easements, and clear builder paperwork for new construction. Take time to read your commitment, ask questions, and get an exact quote for your situation. If you want a local advocate who will walk you through the fine print and coordinate a smooth close, reach out to Jeremy Deas.
FAQs
What is title insurance in Colorado and how does it work?
- It protects against losses from title defects that existed before you bought the home. You pay a one-time premium at closing, and an owner’s policy typically lasts as long as you own the property.
Do I need an owner’s policy if my lender requires one?
- Yes. The lender’s policy protects only the lender. An owner’s policy protects your equity and ownership rights.
Who usually pays for the owner’s policy in Three Springs resales?
- It is common for sellers to pay in many Colorado resale transactions, but it is negotiable and should be spelled out in the contract.
How do I read Schedule B of a title commitment?
- Part I lists requirements that must be cleared before closing. Part II lists exceptions that your policy will not cover, such as easements and CCRs. Review both with your agent and title officer.
What should I know about mineral and water rights in La Plata County?
- Mineral rights may be reserved by prior owners and listed as exceptions. Water rights are separate legal rights in Colorado. Confirm details through public records and your title officer.
What extra steps matter for a new-build in Three Springs?
- Confirm in writing who pays for title policies, obtain builder lien waivers, verify permit closeouts, and ask about endorsements or a survey to address boundary and access questions.
