The Law Society of Ontario requires all lawyers to inform clients about title insurance and it’s advantages when acting for purchasers. Although Title Insurance has been standard in American real estate transactions, such insurance has gained popularity in recent years as part of the typical Ontario residential real estate purchase transaction.
WHAT IS TITLE INSURANCE?
Title Insurance is an insurance policy covering the condition of title or ownership of real property at the time the policy is issued, and is used to provide ownership protection for a purchaser against losses or damages suffered as a result of title problems. Title Insurance is typically obtained by the purchaser’s lawyer prior to closing the purchase for their client’s benefit.
Title Insurance does not replace the role of the purchaser’s lawyer. Rather, it provides an added level of protection for the purchaser. Ontario lawyers still must search title and certify the status of title before a Title Insurance Policy can be issued.
NON INSURED TRANSACTIONS: In the past, Ontario purchasers relied solely on their lawyer’s “legal opinion” that the property purchased had a “good and marketable title”. Unfortunately, no lawyer can completely assure a purchaser that there is absolutely no chance of an error in the government records, that there are no undisclosed claims, or that what appears to be the signature of the prior owner or consenting spouse is a true signature and not fraud or forgery on title. Title Insurance can satisfy such “gaps” in a lawyer’s opinion to cover not only frauds or forgeries prior to closing, but after closing as well.
THE BOTTOM LINE: Title Insurance is golden for the consumer, as it can be included in a purchaser’s total legal costs when one considers typical total legal fees and expenses. In addition, because it is a form of NO-FAULT CERTIFICATION of clean title with (typically) NO DEDUCTIBLE, it has more extensive coverage that the certification of title that has traditionally been provided by lawyers in real estate transactions.
Although several insurance companies have title insurance policy programs, the Law Offices of Stephen Shub are pleased to recommend to all of our clients the PLATINUM TITLE INSURANCE POLICY by First Canadian Title Insurance Company. Our confidence in First Canadian’s Platinum Title Policy is greatest due to this company’s strong status as one of the largest Canadian title insuring companies with one of the highest available insurance company ratings and substantial local Canadian infrastructure. They are quick and efficient in the issuance of policies as well as the processing of any claims.
STANDARD IN EVERY TRANSACTION: The processing of your purchase transaction by our law offices includes arrangement of the FIRST CANADIAN PLATINUM TITLE INSURANCE POLICY, which will be issued to you upon completion of the purchase, and will provide you with title protection. The policy will be issued to purchasers directly from First Canadian Title Insurance Company. Should any purchaser prefer another form or source of title protection, please inform our office in writing at least seven days prior to closing.
TYPICAL RESIDENTIAL POLICY COVERAGE: For a one-time premium (included in our quotation for fees and legal expenses), the policy protects the purchasers against losses suffered from matters set out below, as well as other matters more specifically outlined in the policy:
- defects that would have been revealed by an up-to-date survey
- survey errors or illegibility of survey
- encroachments (before and after closing)
- contravention of municipal zoning laws
- unmarketability of title
- defects in the title
- easements (other than minor easements for utilities, etc)
- contravention of subdivision, development and other agreements
- priority of certain construction liens
- priority of unregistered easements and rights of way
- fraud or forgery (before and after closing)
- solicitor error, omission or fraud
- unpaid property taxes or local improvement charges by a previous owner
In addition to policy coverage, the insured also receives:
- indemnity for actual loss or damage for the amount of the policy (being the price paid for the property) and automatically increasing coverage (with inflation and rising property value) over time to coverage which is up to double the price originally paid for the property.
- Payment of legal fees and costs to address title issues
- a “no fault” method to resolve title problems
The new PLATINUM Title Insurance policy replaces the GOLD Title Insurance Policy for policies issued after January 30, 2006 with expanded coverage. Title insurance will not typically cover pre-existing matters that were known to the buyer (i.e., fence issues, building inadequacies etc.). Pre-existing matters should be checked prior to closing by a home inspector during a home inspection condition, unless such inadequacies relate to a lack of building permit or city by-law compliance.
TYPICAL COST: For residential real estate transactions with a purchase price of less than $500,000.00, a policy can be purchased for $150-299, depending on the type of residential property and whether there is a mortgage. Once a Title Insurance premium has been paid, unlike other types of insurance, there are no annual renewal premiums to be paid. Once the Title Insurance Premium has been paid, there is no reason to pay again, no matter how many years one might own the property.
QUICK CLOSINGS: When a vendor or purchaser wishes to close a transaction quickly, a Title Insurance Policy is often the best option. By eliminating some of the procedures otherwise required, a Title Insurance Policy can facilitate closings on very short notice.
Previously, Title Insurance was only available to home owners at the time of purchase. Now, Title Insurance is available for all existing owners. All home buyers who have used the legal services of Stephen Shub since January 1, 2000 have automatically been title insured. If you are an existing home owner who is not protected by Title Insurance, you may now order a Platinum Title Insurance policy through our office. Please visit EXISTING OWNER TITLE INSURANCE to learn more.