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Title Insurance – Is it for Everyone?

For most Canadians, a home is the largest single investment they will make. In today’s complex real estate environment, home buyers can face a range of unforeseen problems that can affect their rights of ownership and the future marketability of their property. One of the ways some home buyers choose to protect their financial investment is with title insurance.

What is Title Insurance?

Title insurance was first offered in the US in the 19th century to counteract inadequacies in their land registry system. Since systems in Canada are more stringent than in the US, title insurance was only introduced here in the 1990s. Title is the legal term for the right of ownership of property, and title insurance is a contract designed to protect against loss or damage resulting from defects in title. These defects could include:

  • fraud
  • zoning infractions
  • irregularities not revealed by a property survey
  • errors or omissions in deeds
  • undisclosed or missing heirs
  • liens by contractors or for unpaid taxes

Such problems may only become known when you refinance or sell the property.

Title Insurance and the Closing Process

Before a real estate transaction closes, a search of land title records is conducted on the property to verify previous ownership and clarify prior dealings. If a problem regarding title to the property is not discovered before closing, you may end up having to pay significant costs to have it resolved, or you could have challenges in selling the property. For example, if a survey failed to reveal that the garage of your new house extends onto the neighbouring property, you could unexpectedly find yourself forced to re-build the garage on your land only. Title insurance can smooth the closing process, ensuring that the deal is not delayed by defects in title.

Is Title Insurance Right for You?

While title insurance is not for everyone and every situation, it may well have a place in protecting your financial investment. When deciding whether or not title insurance is appropriate, you should consult with your lawyer, who can advise on the right coverage for you. For more information on title insurance and the range of other potential closing costs, give us a call and we can offer expert advice throughout the entire mortgage process.

For more information contact The Wilson Team or call 1-855-695-9250

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