Owner's Affidavit and Gap Indemnity to Title Company

Summary

This template is an owner's affidavit and gap indemnity used in real estate purchase and sale transactions and real estate financing transactions given by a real estate owner to induce the title insurance company to exclude certain standard exceptions from the title insurance policy. This template includes practical guidance, drafting notes, and an alternate clause. An owner's affidavit, which the property owner makes in favor of the title insurance company, includes representations and warranties regarding matters affecting ownership of the property, potential liens on the property, and matters impacting the seller or borrower (such as bankruptcy). The representations and warranties in the affidavit may vary widely depending on the requirements of the insuring title company and may be negotiated between the owner and title company. In those jurisdictions or transactions where a gap indemnity is not required to obtain gap coverage under a title insurance policy, the gap indemnity language in the affidavit may be omitted. For property acquired with financing, a borrower's affidavit may also be required for the lender or title company with modified representations (limited to the best of borrower's knowledge and belief) given that the borrower is becoming the owner and typically would not have extensive knowledge concerning the property. For a full listing of key content covering purchasing and selling commercial real estate, see Purchasing and Selling Commercial Real Estate Resource Kit. For further guidance on title insurance, see Title Insurance. For a general overview of an owners' affidavit and gap indemnities, see Owners' Affidavits and Gap Indemnities.