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What is “Title”?
The word “title” is a legal term that means you have legal ownership of property. You obtain title to property when the owner signs the deed (transfer document) over to you. Title is then registered in the government’s land registration system.
What is Title Insurance?
Title insurance is an insurance policy that protects residential or commercial property owners and their lenders against losses related to the property’s title or ownership.
Do I Really Need Title Insurance?
Title insurance is not a requirement in Ontario. The decision on whether or not you should purchase title insurance should be discussed with your lawyer, title insurance company or insurance agent/broker, to fully understand what type of protection title insurance can provide you, and to determine if other options exist. Once you get all the facts, you can make an informed decision based on your specific situation and needs. It is important to keep in mind that title insurance does not replace legal advice when purchasing property.
What Does Title Insurance Cover?
1.For a one-time fee, called a premium, a title insurance policy may provide protection from such losses as:
2.Unknown title defects (title issues that prevent you from having clear ownership of the property)
3.Existing liens against the property’s title (e.g. the previous owner had unpaid debts from utilities, mortgages, property taxes or condominium charges secured against the property)
4.Encroachment issues (e.g. a structure on your property needs to be removed because it is on your neighbour’s property)
5.Title fraud
6. Errors in surveys and public records and
Other title-related issues that can affect your ability to sell, mortgage,or lease your property in the future.Your title insurance policy will protect you as long as you own your property, and will cover losses up to the maximum coverage set out in the policy. It may also cover most legal expenses related to restoring your property’s title.
What is “Title Fraud”?
Title fraud (or real estate title fraud) is a form of real estate fraud that harms individual homeowners and their lenders. Title fraud typically involves a fraudster using stolen personal information, or forged documents to transfer your home’s title to him/herself (or an accomplice), without your knowledge. The fraudster then gets a mortgage on your home and disappears with the money.
If you are a victim of title fraud, you may be able to receive compensation for your losses if you submit a claim through the government’s Land Titles Assurance Fund (LTAF). For more information on the Land Titles
Assurance Fund visit http://www.gov.on.ca/LTAF/.
What Does Title Insurance Not 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:
1. Known title defects (that were revealed to you before you purchased your property);
2. Environmental hazards (e.g. soil contamination);
3.Native land claims;
4. Problems that would only be discovered by a new survey or inspection of your property (e.g. the property is smaller than originally thought);
5. Matters that are not listed in public records (e.g. unrecorded liens and encroachments); and
6. Zoning bylaw violations from changes, renovations or additions to your property or land that you are responsible for creating.
You need to carefully review your title insurance policy, as it may include additional exclusions and exceptions that are specific to your property.
Title insurance does not provide compensation for non-title related issues.
It is not a home warranty or home insurance policy, and will not provide compensation for:
1. Damages due to flooding, fire or sewer backup;
2. General wear and tear of your home (e.g. replacing old windows, a leaky roof, or an old furnace);
3. Theft (e.g. a burglar breaks into your home and steals your television); and _ Other losses or damages due to non-title related issues.
Refer to your title insurance policy for a full list of exclusions, restrictions, and terms and conditions.
Whether you currently own or plan to purchase a property,this brochure is your guide to understanding title insurance.
You can download this information at the link here
UNTIL RECENTLY, in Ontario, only purchasers of a residence could obtain title insurance at the time of closing a home purchase.
TITLE INSURANCE COVERAGE FOR EXISTING HOMEOWNERS:
Now, all existing homeowners can obtain the same title insurance protection as a purchaser, including coverage against title frauds or forgeries and a variety of other matters affecting title. Coverage provided is equal to the assessed value of the insured property at the time title insurance is ordered with the coverage being increased as property value increases up to double the face amount of the policy amount. Current assessed value of an existing home is based upon the assessed value found in the most recent property tax bill for the existing home owner.
TITLE INSURANCE is NO-FAULT insurance with NO DEDUCTIBLE and is bought one time only for all future years of ownership of a particular residence and does NOT require annual renewals, which is typical of all other types of insurance. The policy covers the homeowner’s quality of title protecting against losses or damages that might be suffered as a result of unknown liens, including frauds or forgeries that might arise in the chain of title both before and after the title policy has been issued.
This brochure is provided by FSCO for information purposes only. Refer to the terms of your title insurance policy for the details of coverage
and exclusions.
Vijay Gandhi is a Re/max Real Estate sales Personnel & Independent mortgage planner- industry insider & CENTUM Agent. If you are purchasing, refinancing or renewing your mortgage, contact Vijay or apply for a Mortgage Check-up to obtain the best available rates and terms.
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