Title Insurance

In today’s real estate environment, many unforeseen factors can affect the future marketability of the title of your home. These include fraud, forgery, zoning by-law infractions and discrepancies not revealed by a property survey. In addition, errors and oversights may occur, which could jeopardize title. These issues may only come to light when a property is being resold or refinanced. The resulting solutions can often become complex and costly.

What is title insurance?

Title insurance provides the purchaser and the lender with comprehensive no-fault protection against title risks inherent in real estate transactions, including:

  • Unknown title defects (title issues that prevent you from having clear ownership of the property)
  • Unmarketability of title
  • Liens on the property
  • Encumbrances and their priority
  • Survey errors
  • Adverse claims to property
  • Fraud and forgery
  • Invalidity or unenforceability of the insured mortgage on title
  • Authenticity of registered documents on title
  • Forced removal of structures on the insured property
  • Known risks which can be added to coverage to facilitate the transaction

The title insurance policy allows the insured owner or lender to make a claim if the specified title risks cause a loss without any requirement to prove negligence.

Why get title insurance?

Protection from financial loss

In any real estate transaction, a great deal of trust is placed in lawyers and their staff. Despite the dedicated efforts of these real estate professionals, it cannot be automatically assumed that every potential problem threatening a title will be identified. Should title problems subsequently surface, the courts will not necessarily hold the lawyer liable for what might be determined to be an unavoidable oversight. Title insurance, however, responds even to unavoidable oversights, and can either rectify a problem or, if a loss is sustained, protect the insured owner or lender up to the full amount of the policy.

Advantages of title insurance

The advantages offered by title insurance include:  

  • No-fault recovery of losses
  • The payment of all related claim costs
  • A reasonable one-time premium
  • Timely closings facilitated via gap coverage – It insures you for the “gap” between the time your property purchase is finalized (home closing) and the time your title is registered in Ontario’s land registration system

What doesn't title insurance cover?

When purchasing title insurance, it is important to read the policy and ask questions to be aware of the coverage that is provided. You also need to be aware of possible exclusions, which may include:

  • Known title defects (that were revealed to you before you purchased your property)
  • Environmental hazards (e.g., soil contamination)
  • Native land claims
  • Problems that would only be discovered by a new survey or inspection of your property (e.g., the property is smaller than originally thought)
  • Damages due to flooding, fire or sewer backup
  • General wear and tear of your home (e.g. replacing old windows, a leaky roof, or an old furnace)
  • Theft (e.g., a burglar breaks into your home and steals your television)

Contacts

For more information on Travelers Canada’s title insurance offerings, please speak to your real estate solicitor or contact one of our experts.

Shelagh Rocchi, 416.642.3658