When buying secondary-market real estate in Russia, most buyers check the “front face”: the seller’s passport and an EGRNP extract. But the real threats hide in the history of ownership transfers — and the current owner often has no idea they exist.
What title insurance is
Standard property insurance covers future damage: fire, flooding, natural disaster. Title insurance works differently — it covers risks whose causes lie in the past.
If a court voids the transaction because of violations that occurred at any earlier stage in the chain of ownership, the insurer pays you the market value of the property stated in the policy.
A real example
You buy an apartment from a perfectly decent family. Everything looks clean; a notary checked. Then it emerges that seven years ago the property was sold by someone who was not legally competent due to illness. His relatives go to court and annul that first transaction. The chain collapses — including your purchase.
Without insurance: the court orders you to return the apartment to the original owner. You are left without housing and without your money.
With insurance: the company pays out the policy amount, you buy a new home, and the insurer handles all the litigation.
Three risks a policy covers
1. Hidden heirs
Children or relatives of past owners can emerge years later and claim a share in your property. This is especially common with apartments that changed hands through inheritance multiple times.
2. Privatisation errors from the 1990s
During the privatisation wave of the nineties, minors were frequently left out of ownership registration. Having reached adulthood, they can challenge all subsequent transactions in the chain.
3. Seller insolvency
If a former owner goes bankrupt within three years of selling to you, creditors may attempt to recover the apartment as part of that owner’s estate. A title policy covers this scenario as well.
Why insurance alone is not enough
Some buyers think: “If I have a policy, I don’t need to check anything.” That is a mistake.
An insurer is a commercial business. A policy contract can contain exclusions that render it useless precisely in your situation. Standard practice: read the insurance contract carefully before signing.
Also, if an insurer quotes a prohibitively high premium or writes unusual conditions, that is a signal. It means the property is legally problematic — and the right response is to walk away from the deal entirely, not to insure it.
Insurance protects against the actual loss of property. A legal review before the transaction minimises the probability of a claim ever arising.
When title insurance is especially important
- The apartment has changed hands multiple times in a short period
- There are inheritance transfers in the ownership history
- The property was privatised in the 1990s with minor family members involved
- The price is below market with no explanation
- The seller is in a hurry and evasive about the property’s history
Read Also
- Realtor vs Lawyer: Who Actually Owns Your New Property
- Bona Fide Purchaser: When the Court Takes the Apartment Anyway
- Family Consent at Property Closing: Does It Really Help?
Need a legal review before buying secondary-market real estate, or help evaluating a title insurance policy? Contact us for a specific property assessment.