Title Insurance: Protect Thyself

Did you know 49% of properties in the GTA have boundary disputes? 
— ProtectYourBoundaries.ca 2018
Title Insurance Home Buyer

Title insurance won’t solve all of your boundary issues but it will help.  I was in a workshop this week led by Chris Kamarianakis, CEO of Protect Your Boundaries and we covered some great information about Title Insurance

The bottom line about Title Insurance.

Title Insurance is an excellent, good value product, but it doesn’t cover absolutely everything as you might have been led to believe.

What is Title?

Title is the rights of ownership recognized and protected by the law.  In real estate, it’s most commonly evidenced by the deed.

What is Title Insurance?

An insurance policy that provides purchasers and lenders with protection against specific title risk.  And it’s also an alternative method to assuring good title.   Title Insurance is NOT boundary insurance, but it does cover some boundary issues that are considered title defects.  It’s basically an insurance policy against defects found in spite of good research and due diligence.

When Do You Get Title Insurance?

If you are purchasing a home and obtaining a mortgage, almost all mortgage lenders will require you to purchase Title Insurance that covers the lenders interest.    If you are buying a property outright without a mortgage, you are not required to purchase Title Insurance.  (Although we would highly recommend you do.)  Title Insurance usually gets introduced to you at the lawyers office, by the lawyer.

Title Insurance Owner’s Coverage

Make sure the policy you are paying for covers you (owner’s policy) as well as the lender (lender’s policy).   Read the fine print!

Who Offers Title Insurance in Canada?

Currently, there are five companies in Canada that offer Title Insurance.  They are:

What Does Title Insurance Cover?

  1. Defects in Title – Ex. If part of the property is in someone else’s name

  2. Compliance Issues – Ex. Bylaws, setbacks, building permit violation

  3. Access and Other Rights and Defects – Ex. Right of way or easement violations
  4. Some of What a Current Survey Could Reveal – Ex. Encroachments on neighbouring property
  5. Title Fraud – Ex. Someone else takes a mortgage out on your property.

These items are typically covered, unless the buyer has prior knowledge of the issue.  Sort of like a pre-existing condition.  Another reason to make sure you read your policy carefully and work with a real estate professional who understands how and when to do up front research.  If something comes up during the due diligence your realtor or you are doing prior to getting title insurance and you find something that would otherwise be covered by Title Insurance, it would be excluded because you knew about it before getting Title Insurance.   Sounds confusing?  Ask a professional to clarify.

Remember, Title Insurance covers SOME items, but not all that may come up.  Read your policy carefully!

TIP: Some mortgage companies and survey companies recommend purchasing a survey along with your Title Insurance, to make sure you are adequately prepared as a buyer. 

don’t have Title Insurance?  It’s not too late.

You can buy title insurance for an existing property that doesn’t currently have any.  Just directly approach the companies that offer Title Insurance and decide which one is best for you. 

Title Insurance Summary

Don’t leave Title Insurance until the closing ceremony at the lawyer’s office. Get the policy early and read the fine print of your Title Insurance document to be sure you understand what you are buying, what is covered, and how it works.  It’s a great product for what it DOES protect, in our opinion as professional realtors, but make sure you know what you are buying.

3 Key Takeaways from Chris Kamarianakis, CEO of Protect Your Boundaries

  1. Title insurance is a fantastic product for Ontario home buyers.  Never buy a house without it.
  2. But it doesn’t cover everything you may think.
  3. And it doesn’t replace the need for good old fashioned research before you buy.
“Bottom line, make sure you work with a realtor who knows how to maximize the benefit of Title Insurance AND good research in your quest for a new home.” 
— Chris Kamarianakis, CEO of Protect Your Boundaries

Thank you to Chris Kamarianakis, CEO of Protect Your Boundaries, for the workshop The A-Z of Title Insurance.  Protect Your Boundaries has the largest accessible database of survey plans in the GTA.  You can search for an existing survey or order one to be done for your property.  To learn more go to www.ProtectYourBoundaries.ca or contact Chris at Chris@ProtectYourBoundaries.ca 

For more Buyer information or about real estate in your neighbourhood, contact Rayissa at rayissa@homes4toronto.com or via text or directly at 416-400-0805.