Hi, my name’s Danielle Demerino. I’m a Toronto real estate agent with the goal of helping my clients achieve their real estate dreams and educating people on real estate. Today we are going to talk about Title Insurance, what it is and why do you need it.
To understand the concept of Title Insurance, we need to first define the term “title”, which essentially refers to ownership of a property. Title Insurance, is a type of insurance policy that provides protection to property owners or lenders against losses caused by defects in the title.
In simpler terms, if there are any issues or problems with the property’s title that arise after purchase, Title Insurance will compensate the owner for any financial losses or damages incurred. This insurance policy typically covers losses up to a maximum coverage limit and may also include legal fees associated with defending the owner’s title rights.
Title insurance provides coverage for a range of issues related to the title of a property. These may include:
- Unidentified defects in the title
- Any outstanding liens or claims against the property
- Boundary disputes and encroachment issues
- Title fraud or forgery
- Errors in surveys or public records
- Title-related problems that may impact the property’s ability to be sold, mortgaged or leased
- Legal expenses incurred in defending against challenges to the property’s title rights.
Overall, Title Insurance offers protection to property owners and lenders against a variety of potential risks and issues related to the ownership and use of a property.
While Title Insurance covers a wide range of issues related to a property’s title, there are certain things that it does not cover. These may include:
- Title defects that were known prior to purchasing the policy
- Matters that are not listed in public records or are not covered by the policy
- Environmental hazards or contamination on the property
- Claims by Indigenous communities or native land claims
- Issues that are discovered through new surveys conducted after the property was purchased
- Violations of zoning by-laws that the property owner is responsible for
- Damage or losses due to natural disasters such as flooding, fire, or sewer backup
- General wear and tear of the property
- Theft or criminal activity on the property
- Losses or damages caused by non-title related issues.
It is important to carefully review the terms of a Title Insurance policy to understand what it covers and what it does not when buying real estate.
What is the cost of title insurance?
The price of a Title Insurance policy in Ontario varies based on several factors, including the type of property, its value, the mortgage amount, and the insurer providing the policy.
Title Insurance premiums are typically a one-time payment and are usually paid at the time of closing. Unlike other types of insurance, Title Insurance does not require monthly payments.
In Ontario, there are four primary Title Insurance companies that offer policies:
- Title Plus
- First Canadian Title
- Stewart Title
- Chicago Title
It is advisable to compare policy options and costs from different insurers before selecting one that suits your needs and budget.
While Title Insurance is not technically required, most lenders require it as a condition of the mortgage. Since the majority of property purchases involve a mortgage, Title Insurance is typically considered mandatory.
Lawyersf generally recommended that you obtain Title Insurance even when it is not required. The one-time premium cost provides valuable protection and peace of mind compared to the potentially high costs of dealing with title issues. Additionally, the policy coverage lasts as long as you own the property.
If you did not obtain Title Insurance when you initially purchased your property, you can still purchase a policy at a later time.
If you have any further questions, please feel free to give me a call at 416-728-5401. I’m happy to chat or recommend a real estate lawyer or mortgage broker that can give you further details.
