Escrow & Title
A Florida buyer discovers after closing that there is an unpaid property tax lien from 3 years ago on the property. If the buyer has an owner's title insurance policy, the insurer will:
ARefund the purchase price to the buyer
BDefend the buyer's title and pay to resolve the lien, up to the policy limit✓ Correct
CRequire the buyer to pay the lien and then reimburse them later
DDo nothing since tax liens are always excluded from title insurance
Explanation
An owner's title insurance policy covers defects in title existing at the time of closing (subject to policy exceptions). The insurer will defend the insured's title and pay to clear covered title defects, including undiscovered tax liens up to the policy limit.
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