Title Insurance is an insurance policy that protects property owners and their lenders against losses related to the property’s title or ownership. Although commonly considered when closing on a newly purchased home, Title Insurance is not a legal requirement in Ontario.
What does Title Insurance cover?
Protection from such losses as:
- Unknown title defects (title issues that prevent you from having clear ownership of the property)
- Existing liens against the property’s title (e.g., the previous owner had unpaid debts from utilities, mortgages or property taxes secured against the property)
- Encroachment issues (e.g., a structure on your property needs to be removed because it is on your neighbour’s property)
- Title fraud
- Errors in surveys and public records
- Other title related issues that can affect your ability to sell, mortgage or lease your property in the future.
What does Title Insurance Not Cover?
Possible exclusions may include:
- Known title defects (that were revealed to you before you purchased your property)
- Environmental hazards (e.g., soil contamination)
- Native land claims
- Problems that would only be discovered by a new survey or inspection of your property
- Matters that are not listed in public records (e.g., unrecorded liens and encroachments)
- Zoning bylaw violations from changes, renovations or additions to your property or land that you are responsible for creating
- Non title related issues.
Speak to your lawyer to find out more about the cost and to determine if purchasing title insurance is the right decision for you.
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