A Minnesota property is being conveyed by deed. The grantee's attorney discovers after closing that the grantor had a judgment lien recorded against the property before the deed was executed, but the title search failed to reveal it. The grantee purchased an owner's title insurance policy at closing. Which of the following best describes the grantee's situation?

Correct Answer

B) The grantee may file a claim under the owner's title insurance policy to cover losses from the undiscovered lien

An owner's title insurance policy protects the buyer against losses from title defects — including judgment liens that were of record but were missed during the title search. Even though the lien was technically a matter of public record, the title insurance policy covers losses from such defects that were not disclosed prior to closing. The grantee can file a claim with the title insurer, who will either defend the title or compensate for the loss.