Insuring against title trouble

First Title Poland (FTP), part of the First American Corporation, opened its offices here four months ago. Poland's branch was formed by the association of First Title Insurance and First Title CEE. The firm is offering title insurance for real-estate investors, which insures those who buy property against losses from defective or inaccurate titles, liens and encumbrances.

Legal experts say that any properties in Poland that could have been bought without any legal complications are already off the market. Now that the Polish real-estate market has become so tight, developers must look into properties that could be burdened with unclear ownership status. Such investments present a greater risk for the investor.

"Register history doesn't always show the real situation of the property," says Aleksander Hetko from Hogan & Hartson, a law firm that cooperates with FTP. "There are many cases when an investment company needs to estimate the level of risk and make a decision whether to move forward or quit the whole investment. Title insurance is an option that can eliminate this risk and help with obtaining a bank loan."

John Bakowski, country manager of First Title Poland, said that FTP assisted with projects in which the title risk involved with the transaction was so high that banks were unwilling to grant the necessary loans and investors were unwilling to close the deal.

"This is a standard in the US and there is no transaction which is not covered by title insurance," said John Bakowski. "Foreign investors are already familiar with this product, so when they decide to invest and bring their business into Poland, they ask for title insurance. I believe that as a result of this, the number of real-estate investments in Poland will increase."

In 2005 the First American Corporation had revenues of $8.1 (zł.24.6) billion. The firm has 2,100 offices through all the continents, except Africa.

Piotr Paciorek