title insurance

Title Insurance in Ontario

Title insurance in Ontario is relatively new, growing quickly. With owner policies, title coverage includes property value along with equity.

Why title insurance is popular?

  1. Consumer Acceptance: High awareness about insurance in general
  2. Straightforward claim procedures: Assuming the defect falls within policy coverage, recovery of losses is easy
  3. Scope of Coverage: Not limited to title defect coverage’s, also insures over known, already examined defects and risks
  4. Existing Surveys: Makes financial sense to have it, new surveys might reveal unforeseen conditions and through title insurance these issues are dealt with easier than surveys.
  5. Value Added Service: Realtors like it and favor it for its ability to fasten closing process.
  6. Lenders take comfort in the value of title insurance

Policy Coverage

  • Duty to indemnify: actual loss occurred
  • Duty to defend: legal expenses associated with a claim
  • Title coverage issues should be referred to legal experts
  • Separate policies exist for residential and commercial
  • Title insurers may have policies for lenders and owners
  • Any title insurance should be carefully reviewed for inclusions, exclusions, etc…

Typical Risks Covered

  1. Not properly signed, sealed and delivered documents
  2. Defective registry on title
  3. Fraud or forgery affecting title
  4. Inability to access property
  5. Title is unmarketable for a number of reasons
  6. By-law violations: deck, patio, etc issues
  7. Contravention in development of property
  8. Construction liens discovered on title
  9. Other individuals’ claiming rights over a property as a result of previous contracts, etc
  10. A lien that has a priority on title
  11. Certain restrictive covenants that affect the use of land
  12. Someone else owns an interest in title
  13. Issues around title insurance lack interpretation in Canadian Courts

Listing/selling benefits

  1. Survey: Elimination of survey can represent significant time and money savings
  2. Title problems at listing: Deck example is a good one. The seller is in a position to assure any potential buyer…
  3. Marketing incentive: Sellers’ commitment translates into cost savings at the point of negotiations…
  4. Title problems at closing: A minor encroachment, a final inspection of a new addition is not complete but through title insurance the closing can be done on time

Legal Disclosure Requirements

  • A lawyer has to advise the client that title insurance is not mandatory and not the only option
  • A lawyer can not receive any kick back from a title insurer
  • A lawyer has to insure the client that no compensation is being furnished
  • A lawyer shall disclose the relationship between the profession, the Society and Lawyers’ Professional Indemnity Company

Title Insurance in Ontario

Here is a presentation on Title Insurance in Ontario.

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