What is Title Insurance?
Title insurance is an insurance policy covering the condition of title or ownership of a property at the time the policy is issued, and is used to provide ownership protection against losses or damages suffered as a result of title problems.
Who can Purchase Title Insurance?
Residential title insurance can be purchased by anyone who is buying residential properties. You can also insure commercial properties, however different coverages & premiums apply. Residential title insurance is available for a variety of residential properties including vacant land, single family homes, duplexes, triplexes, 4-plexes, mobile homes, cottages, condominiums & co-operatives.
How can Title Insurance Protect You?
Title insurance provides you with more protection than a Lawyer's opinion & it also protects you if someone else claims a legal interest in your property, even after you have purchased it. It can cover you against the following:
- Pre-existing municipal work orders.
- Liens against the title.
- Violations of municipal set back of zoning requirements.
- Structures located on an adjoining property other than fences or boundary walls.
- Frauds or forgeries, which can affect legal ownership of the property.
- Arrears of Realty taxes or utility charges (other than final water meter readings).
- Eliminates the need for a survey (most lenders will waive the requirement for a survey if you buy title insurance).
- Survey errors.
- Encroachments.
- Invalidity or unenforceability of the mortgage on title.
- Contravention of subdivision & development.
- Lawyer error, omission or fraud.
- "Defense of Title" coverage, whereby the title insurance company will pay all legal costs associated with a challenge to your legal ownership for any covered title risk.
Why Should I Purchase Title Insurance?
A Lawyer's opinion that you are getting clear title to your property is subject to certain limitations including that there are no forged documents in the claim of title & that the information provided by the municipality is accurate. The opinion is also valid only at the point in time that the deed is registered.
A title insurance policy will compensate you for title defects even if there are forged documents in the chain of title or inaccuracies in the information provided by the municipality. As well, a residential title insurance policy provides coverage for certain title defects, which can occur long after the deed is registered.
Buying a home is such an important investment, you want assurance that title is 100% clear (except for any mortgage). You don't want to find out, after closing, that an old lien was never discharged, that the previous owners didn't pay their property taxes, their utilities, or that someone has a claim against your land.
How Much does Title Insurance Typically Cost?
For a one-time fee, a policy can be purchased for a residential Real Estate transaction of less than $500,000 for $150-$250 depending on the type of residential property. It is also available if the owner already maintains an ownership interest in the property. An owner, must obtain title insurance for a lender any time that the property is being mortgaged.
Protect Ownership with Title Insurance on Closing.
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