Today I thought I would touch on a topic that is pretty well always mentioned in a mortgage commitment but rarely explained or truly understood. Hoping this will help shed some light on Title Insurance.
Among the slew of insurance options that come with purchasing a new home, you've likely come across the term "title insurance". But what exactly is it - and is it worth forking over the extra money?
In a nutshell, "title" refers to your ownership of a property - so "title insurance" protects both you ( the owner) and the lender against loss resulting from title defects or fraud. While other types of insurance may protect your home from things that may happen in the future -such as fire or flooding - title insurance protects your home from things that may have already happened, but weren't immediately evident upon the purchase of your home. Some examples, as cited by title insurance company, Stewart Title, include:
- someone else owns an interest in your title
- existing liens against the title
- violations of municipal zoning by-laws
- encroachments onto an adjoining property (other than fences and boundary walls)
- setback violations
- realty tax arrears
- outstanding municipal utility charges, provided such charges form a lien on title
- existing work orders
- lack of legal access to the property
- unmarketability of the land due to adverse matters that would have been revealed by an up-to-date survey / RPR/ Building Location Certificate
- fraud, forgery and false impersonation to the extent they affect the validity of title
Many homeowners find title insurance to be a worthwhile purchase because it's a minimal one-time fee with no deductible, and stays in effect for the amount of time you own the home. While title insurance is typically acquired at the time a home is purchased, there are options available to those home owners who are refinancing. For more information, give us a call - or check out one of Canada's title insurance companies, such as Stewart Title, First Canadian Title or Chicago Title Canada.
Hope you found this usefull and as always you can reach me via e-mail or phone to discuss any questions you may have.