Colorado Title Insurance for New Construction: Protecting Your Dream Home Before It’s Built
- Jerad Larkin
- 15 hours ago
- 5 min read
Building your dream home in Colorado? Here’s how title insurance protects your investment from the ground up.
Buying a brand-new home or custom-built property in Colorado is one of the most exciting milestones a homeowner can experience. Whether you’re working with a developer in Denver’s Sloan’s Lake, a builder in Colorado Springs, or constructing on your own lot in Douglas County, new construction offers endless potential - but also unique risks. That’s where Colorado title insurance for new construction comes in. It safeguards your ownership rights and protects you from unexpected issues like mechanic’s liens, survey disputes, builder bankruptcies, or unrecorded easements that can arise before or after closing. Even when you’re the first owner, title insurance ensures you’re protected from hidden claims tied to the land, construction, or developer’s financing.
Why Title Insurance Is Essential for New Construction in Colorado
Many buyers assume that since their home is newly built, there can’t be any title issues. Unfortunately, that’s one of the biggest misconceptions in real estate.
Every new home sits on land that has its own history - and that history can include loans, easements, or ownership disputes that predate your construction project.
On top of that, construction itself introduces new risks, from contractor liens to platting errors.
Title insurance ensures that when you receive the keys to your new home, you also receive clear, undisputed ownership - both for the structure and the land it sits on.
Common Title Risks for New Construction Buyers
🔹 1. Mechanic’s Liens
One of the most common title issues in new construction is a mechanic’s lien, which can be filed by contractors, subcontractors, or suppliers who claim they weren’t paid for their work.
Even if you’ve paid your builder in full, a subcontractor several tiers down the chain could still file a lien - putting your property at risk.
Title insurance protects you from financial loss and defends against any such claims.
🔹 2. Unreleased Developer or Builder Loans
Many builders finance projects through construction loans. If those loans aren’t properly released or recorded, you could inherit the builder’s debt after closing.
A title search ensures all construction loans, deeds of trust, or financing liens are cleared before you take title.
🔹 3. Survey and Boundary Errors
New subdivisions often go through complex platting and re-platting processes with local governments .Errors in legal descriptions or survey markers can cause disputes over driveways, fences, or utility easements. Title insurance ensures you’re covered if the property’s recorded boundaries differ from what’s physically on the ground.
🔹 4. Easements and Utility Rights
Most new developments include recorded easements for roads, sewer lines, or shared utilities. If these aren’t accurately documented, they can impact your ability to build additions or landscape in the future.
Title insurance identifies all easements ahead of time, giving you clarity on what can and can’t be built on your property.
🔹 5. Builder or Developer Bankruptcy
If a builder or developer goes bankrupt before construction is complete, unresolved financial obligations can cloud title or delay closing. Title insurance ensures your property remains free from claims related to the builder’s debts or partnerships.
The New Construction Closing Process in Colorado
While every new build is unique, closings for new construction typically follow a specific sequence. Here’s how Chicago Title Colorado handles the process to keep your investment protected.
Step 1: Title Search and Commitment
Before construction begins, the title company reviews the property’s legal history - confirming ownership, checking for liens, and ensuring there are no title defects tied to the land.
Step 2: Builder and Developer Verification
The title company confirms that the builder or developer has the legal right to construct on the property and that any recorded covenants or HOA documents are current and valid.
Step 3: Escrow and Fund Management
During construction, escrow accounts are often used to manage builder draws and payments. Chicago Title Colorado ensures all funds are handled securely and in compliance with Colorado law.
Step 4: Final Inspection and Certificate of Occupancy
Before closing, the title team verifies that the property matches the legal description and that all required city or county approvals have been recorded.
Step 5: Policy Issuance
At closing, you’ll receive an Owner’s Title Insurance Policy - guaranteeing that you hold clear title to both the land and improvements.
How Title Insurance Protects Colorado Homebuyers After Closing
Once construction is complete, title insurance continues to protect you for as long as you own the property.
It covers:
Legal fees if someone challenges your ownership
Financial loss due to liens, unpaid contractors, or recording errors
Mistakes in the property’s legal description or boundary surveys
Fraudulent documents or forged signatures affecting your title
In short, it’s your long-term protection plan for your most important investment.
Example: New Build Title Issue in Douglas County
A Colorado homebuyer purchased a newly built home in a suburban development. Months later, they received a letter from a subcontractor claiming they were owed payment for roofing materials. Even though the buyer had paid their builder in full, the subcontractor filed a mechanic’s lien against the property. Because the buyer’s Owner’s Title Policy was issued through Chicago Title Colorado, the lien was investigated, resolved, and released without cost to the homeowner.
What Builders and Developers Should Know
Builders and developers also benefit from clear title and escrow support. Chicago Title Colorado works with builders to:
Record subdivision plats and declarations
Manage construction escrow disbursements
Coordinate with lenders on builder payoffs
Provide Builder’s and Subdivision Title Policies for development projects
A strong title partnership helps builders close faster, maintain trust with buyers, and avoid post-closing disputes.
Tips for Homebuyers Purchasing New Construction
✅ 1. Always get an Owner’s Title Policy.
Even if your builder says title insurance isn’t necessary, it’s your only protection from prior claims or contractor disputes.
✅ 2. Review your title commitment.
Read your commitment carefully - it lists easements, CC&Rs, and any restrictions that affect your property.
✅ 3. Confirm the builder’s payoff releases.
Ask your title company to verify that all builder loans and liens are satisfied before closing.
✅ 4. Verify property boundaries early.
Don’t wait until after landscaping to discover a boundary issue. Request a survey or ILC before closing.
✅ 5. Work with experienced professionals.
Choose a title company that understands Colorado’s unique building regulations, zoning laws, and construction challenges.
Why Jerad Larkin and Chicago Title Colorado Are the Best Choice
Jerad Larkin and his team specialize in helping homebuyers, builders, and developers navigate the complexities of new construction closings across Colorado.
When you work with Chicago Title Colorado, you get:
Comprehensive title research on land and builder history
Local escrow teams who coordinate builder payoffs and releases
Fast, accurate closings for both production and custom builds
The security of one of the nation’s most trusted underwriters
From Denver to Colorado Springs and beyond, Jerad’s expertise ensures your new home starts on a solid foundation - legally and financially.
Conclusion
Building a home in Colorado is an exciting journey - but it also comes with risks hidden beneath the surface. Title insurance protects your ownership and financial future by ensuring your new property is free from defects, liens, and legal disputes.
Before you build or buy new construction, make sure your closing includes Chicago Title Colorado - the trusted partner for builders, buyers, and agents statewide.
Questions? Contact:
📞 Jerad Larkin – Chicago Title Colorado
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