The obvious question about a brand-new house is why it needs title insurance at all. Nobody has ever owned it. There is no chain of prior owners to inherit problems from. So what exactly is the policy insuring?
The house is new. The land is not. And in new construction, the risk that matters most is not something from the past — it is something created during the build itself.
Construction Liens Are the Real Exposure
Florida’s construction lien law, Chapter 713 of the Florida Statutes, gives contractors, subcontractors and material suppliers a lien against the property for work performed and materials furnished. A claimant generally has 90 days from its last furnishing to record a claim of lien.
The part buyers do not expect: the lien attaches to the property, not to the person who failed to pay. If your builder paid the framing crew but not the tile supplier, the tile supplier’s lien lands on your house. You can have paid the builder in full, closed, moved in, and still receive a claim of lien — and the 90-day window means a lien can be recorded after your closing for work done before it.
This is not a theoretical risk in Southwest Florida. Builder failures, subcontractor payment disputes and supplier claims are ordinary events here, and they concentrate in exactly the fast-growth corridors where most new construction happens.
What Protects You
- A properly collected set of lien waivers and releases from the general contractor and every subcontractor and supplier who furnished to the job, gathered at closing rather than assumed.
- The contractor’s final affidavit, required by statute, identifying everyone unpaid.
- A search run to the closing date, plus a gap check, so liens recorded late in the build are caught.
- An owner’s title policy, which covers defects existing at the policy date — including recorded liens for work performed before closing — and covers the cost of defending the title, which in a lien contest is often the bigger number.
How the standard construction lien exception is handled in the commitment is the single most consequential item in a new construction file. It is worth reading, and worth asking about.
The Land Still Has a History
Beyond the build, the parcel carries whatever came with it:
- Platted easements for utilities, drainage and access — frequently across the exact strip where an owner later wants a pool or a fence.
- Deed restrictions and recorded covenants controlling setbacks, materials, height and use.
- Community development district assessments, common in newer Southwest Florida subdivisions, which are recorded obligations running with the land.
- Impact fees and open or expired permits from a prior structure on the lot.
- Older Lee and Charlotte County subdivisions where platted lots were sold decades ago and the chain of title has gaps, unadministered estates or heirs who were never cleared. Many currently building lots came out of exactly that inventory.
- Wetland, conservation and coastal construction control line restrictions affecting what may be built and where.
Buying From a Builder
Builder contracts routinely name the builder’s affiliated title company. You are not required to use it. Under RESPA Section 9, a seller in a residential transaction cannot make your purchase of title insurance from a particular company a condition of the sale. Where the builder’s affiliate is used, federal law requires a written Affiliated Business Arrangement disclosure telling you the relationship exists and that you are free to shop.
Florida promulgates title insurance rates, so the premium is the same wherever the policy is issued. What differs is who reviews the lien waivers, who runs the search to the date, who catches the easement across your pool site, and whether that party has an interest in the builder.
Construction-to-Permanent Financing
Where the build is financed by draws, each disbursement needs its own lien check and waiver collection, and the file needs to hold together from the construction loan through the permanent loan. We handle draw closings and the permanent financing on the same file, so the lien record is continuous rather than reconstructed at the end. See lender title services.
Start a New Construction Closing
We close new construction across Cape Coral, Naples, Punta Gorda, Port Charlotte and Venice. Call (239) 400-5540, email Info@esquirelandtitle.com, or use the contact page.