We get a lot of questions about Title Insurance. What is it and why do you need it?
In recent years, it has become the norm to order a policy of title insurance when a client is purchasing a property.
Taken from Stewart Title’s website www.stewart.ca, title insurance covers:
- someone else owns an interest in your title
- existing liens against the title
- violations of municipal zoning by-laws
- encroachments onto an adjoining property (other than fences and boundary walls)
- setback violations
- realty tax arrears
- outstanding municipal utility charges, provided such charges form a lien on title
- existing work orders
- lack of legal access to the property
- unmarketability of the land due to adverse matters that would have been revealed by an up-to-date survey / RPR / Building Location Certificate
- fraud, forgery and false impersonation to the extent they affect the validity of title
A prudent lawyer will search title to ensure that there is nothing obvious to be concerned about, however, in many instances, there is not enough time to perform certain searches due to the quick closings we are seeing these days. In our experience, the most common title insurance claim is for arrears of property taxes (where the Vendor certifies that the taxes are paid up to date, but in fact they are not). A quick title insurance claim will usually resolve this issue, and the taxes are paid up by the insurer. You own the policy for the whole time you own the house.
Generally, If you are purchasing a property and are obtaining mortgage financing, the lender will require us to order a policy of title insurance. We think it represents good value for money for the extra security to know that your title is protected for your whole ownership of the home.