This month’s newsletter deals with title insurance and some of the things it covers.
When I started practicing law in the 80s there was no such thing as title insurance in Canada. Now many lenders make it a mandatory requirement even for strata properties, where in my opinion, the lender’s risk of a title or other problem is almost non-existent. Title insurance is also available for buyers. Many agents have asked me what the benefits are for buyers to have it. There are several companies that provide such insurance and I have not compared their coverages but would assume they are basically the same.
There are different coverages for strata properties and for non- strata properties. The coverages for stratas include; strata fee arrears; tax and public utility arrears; work orders; builder’s lien claims for work furnished before closing; fraud, forgery, false impersonation, duress, mental incompetence (including fraudulent powers of attorney) that would have affected the vendor’s ability to transfer title; a title claim by some claiming to an interest in title, e.g. beneficiary, spouse.
For non- strata properties the coverages include: unmarketability of land due to adverse matters that an up-to date survey would have revealed, encroachment issues onto a neighbouring property) other than a boundary wall or fence); outstanding work orders, tax arrears, existing judgments or liens and affect title to the property; title fraud; and legal fees incurred in defence of the owner’s title. Two other coverages that would be really relevant if you know or suspect there have been previous renovations or additions, are coverage for zoning compliance. The insurance will cover a homeowner (i) being forced by the municipality to remedy or remove an existing structure that is non-compliant with zoning regulations, and (ii) forced removal or remedy by the municipality to a structure because the previous owner did not obtain the required building permits to do the original work.
The insurance is not that expensive if the buyer is already required to obtain insurance for the lender. The extra policy for the buyer is $50-75 usually. For a buyer’s only policy, prices start at $100 and increase depending on whether it is a strata or non strata property and the value of the property. Insurance for non-strata properties is more expensive, especially if the property is over $750,000 in value.
I remind agents that I offer free short phone consultations, and fixed all inclusive fees for transactions and will visit the client in the evening or on weekends to sign documents. Sale fees are between $475 & $500 and purchase fees are between $950 & $1,000 for properties under $1,000,000. These are inclusive of all taxes and disbursements, except for title insurance if required by the lender. I also do corporate commercial work and wills and estates.