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?
- Consumer Acceptance: High awareness about insurance in general
- Straightforward claim procedures: Assuming the defect falls within policy coverage, recovery of losses is easy
- Scope of Coverage: Not limited to title defect coverage’s, also insures over known, already examined defects and risks
- 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.
- Value Added Service: Realtors like it and favor it for its ability to fasten closing process.
- Lenders take comfort in the value of title insurance
- 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
- Not properly signed, sealed and delivered documents
- Defective registry on title
- Fraud or forgery affecting title
- Inability to access property
- Title is unmarketable for a number of reasons
- By-law violations: deck, patio, etc issues
- Contravention in development of property
- Construction liens discovered on title
- Other individuals’ claiming rights over a property as a result of previous contracts, etc
- A lien that has a priority on title
- Certain restrictive covenants that affect the use of land
- Someone else owns an interest in title
- Issues around title insurance lack interpretation in Canadian Courts
- Survey: Elimination of survey can represent significant time and money savings
- Title problems at listing: Deck example is a good one. The seller is in a position to assure any potential buyer…
- Marketing incentive: Sellers’ commitment translates into cost savings at the point of negotiations…
- 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.