Title Insurance

What is the coverage in Title Insurance?

A title insurance policy safeguards against losses arising from:

• Unidentified title defects (any title issues preventing you from clean property ownership);
• Current property liens against its title (outstanding utility debts, mortgages, property taxes);
• All encroachment issues;
• Title fraud issues;
• Public records and survey errors;
• Any title-related issues which have a direct impact on your capacity to sell, lease or mortgage your property in the future.

What Kind of Properties Can Be Insured with Title Insurance?

• Condominiums
• Cottages
• Rental units and leased properties
• Plots of vacant land
• Cooperative properties
• Rural properties

What is Existing Homeowner Title Insurance Policy?

This policy safeguards the title of a home owner who did not purchase a title insurance at the time when they purchased the residential property.

The types of property which can be covered include vacant land, cooperatives, cottages and condominiums and residential dwellings. A maximum of 6 residential units are included in the policy post which the they are classified as commercial units.

The risks covered are all the risks which should be unknown to insured and existed on the date of the original purchase of the property. The insurance policy is customized for the home owner to actually reflect the original transactions’ details. The existing homeowner policy is an option for people who brought their homes decades ago or did not obtain any policy.

It is a convenient and useful option to safeguard your home and purchase title insurance by paying a one time premium. The premium amount is based on the home value at the time of taking the policy.

Policy obligations are limited to payment of the lump sum premium amount and no renewal fees exist. If you wish, you can include the theft protection option as well, which can be conveniently added to the main title insurance policy.

This policy protects the person’s who will inherit the insured property and the insurance amount if calculated post an MPAC property assessment.

The insured policy amount is typically higher of the current fair market value as per the assessment of the amount paid for the property at the time of purchase. The coverage goes up with an increase in the property value up to a maximum of 200%.

How are Title Insurance and Property Survey linked?

A title insurance policy does not eliminate the need for a physical survey. In case a homeowner does not get a new survey of the property done, then efforts should be made to get a legible copy of an existing survey.

For any changes made to the property, a survey will be required. The second dwelling unit is not covered under the title insurance until the city provides the zoning search which confirms the legality of the second unit.

Change of use of the property is not covered under title insurance. In case the purchaser has any plans to change the property use, the real estate lawyer should be made aware of those plans so that proper due diligence can be carried out.

Title Insurance covers the losses arising from the title but is not a substitute for any information gleaned from a survey. For example, if a person purchases a property that had a backyard which the survey revealed to be an encroachment, which was actually a part of the neighbour’s property, title insurance will not be covering this.

What is not covered in Insurance?

There are standard exclusions in a title insurance policy which are as follows:

• Any title defects which are known to you or agreed to by you;
• Environmental hazards;
• All native land claims;
• Issues discovered by a new inspection or survey of your property;
• All unrecorded encroachments and liens, not available in public records;
• Any changes, renovations to your property under your responsibility which result in changes to Zoning bylaw violations