WHAT IS TITLE INSURANCE?

In its simplest form, title insurance protects the lender and homeowner against a number of risks related to the property’s title or ownership.

What began as a more timely alternative and eventual replacement for obtaining a survey certificate; title insurance, has now become standard practice for real estate purchases and refinances. Simply put, title insurance protects both the lender and the homeowner against a variety of risks related to home ownership and property title.

While the Assurance Fund of the Land Title Office may reimburse the true property owner from fraudulent instances or errors, title insurance is usually a quicker process and less expensive, saving both time and financial headache.

GOOD TO KNOWS

• There are no annual premiums for title insurance, it is a one-time cost.

• Title insurance is purchased at the solicitor's office and will be included in your lawyer or notary's breakdown of your closing costs.

WHAT DOES TITLE INSURANCE COVER?

While title insurance covers many instances of property registration errors, the main coverage for lenders, and clients, is fraud. Given the uptick in identity theft over the years, title insurance would cover cases where a fraudster impersonates a property owner and secures loans without their knowledge against the property. Title insurance would also cover spousal impersonation and lawyer fraud.

In addition to protecting against title fraud, title Insurance can cover:

• violations of municipal by-laws;
• encroachments onto an adjoining property;
• property tax arrears;
• existing work orders;
• lack of legal access to the property;
• unpaid strata assessments;
• zoning and setback non compliance;
• forced removal by a governmental authority of a structure built without a required building permit;
• legal status of any septic system;
• gap coverage.
  

HOW MUCH DOES IT COST?

A lender policy typically costs $175 and an owner policy typically costs $50, though for properties valued over $1,000,000 this cost is increased (by $0.90 per $1,000 above the $1,000,000 threshold).

IS IT REQUIRED?

The vast majority of lenders will require a lender policy to be purchased at the solicitor's office as a condition of your mortgage funding. Whether you choose to purchase an owner policy in addition to the lender policy is up to you.