Congratulations! You are now a property owner. Before you celebrate this important milestone in life, did you inquire about the importance of Title Insurance in Ontario?
If not, now is an important time to educate yourself on the benefits of possessing Title Insurance with real estate.
What is Title Insurance?
In simple terms, Title Insurance is legal proof of property ownership. For example, after signing transfer documentation from the owner, you obtain the title. Title Insurance provides protection against financial loss if only issues with the title to the property occur.
A Title Insurance may be purchased through a lawyer, or a Title Insurance company. Think of this Title Insurance policy as an added layer of security when purchasing real estate, also known as your legal proof of ownership. Imagine if there is a title dispute after this sale; in this case scenario, you, as the property owner, are covered.
Title Insurance v. Boundary Insurance
The function of Title Insurance is not to reveal issues with the property prior to purchase. For example, fences, boundary walls, and other items are not a part of the coverage.
Now, as a potential property owner, how must one avoid these types of liabilities? Property owners must explore options, such as survey plans, and consultations with surveyors. These types of services help address boundary issues.
To add on, having a survey plan that could have revealed an issue at hand could help avoid the issue of an insurance company denying a claim.
Types of Title Insurance in Ontario
There are three types of Title Insurances in Ontario.
1. Commercial
This type of Title Insurance is related to businesses. For example, if your business owns a type of real estate, this type of plan ensure that the estate is insured.
2. Residential
Residential Title Insurance ensures that your property is covered in terms of potential issues in the title of the property. For example, if the land has an an unpaid mortgage, you would be protected from those issues.
3. Lender Title Insurance
This type of Title Insurance covers lenders who lend money. In this case scenario the borrower’s are the purchasers, and this type of insurance protects the lender.
Are You Ready to Purchase Title Insurance in Ontario?
The cost associated with your policy is dependent on various factors. Below is a list of questions you should be asking yourself before the purchase of a Title Insurance:
1. What type of coverage are your choosing?
2. What is the value of your property?
3. Is the police effective on your property’s closing date?
Remember the 3 P’s When Purchasing a Title Insurance
1. Understand the Title Insurance process
2. Research the Title Insurance providers
3. Thoroughly reading the Title Insurance policy
Facts About Title Insurance
- You would make the Title Insurance claim yourself, or hire an experienced lawyer to make the claim for you
- In Ontario, the cost of a Title insurance is around $200.00 to $500.00 dollars for Residential properties —the prices vary based on the value of the property and the type of Title Insurance company you choose as a property owner
- Title insurance does not cover all boundary issues
References
“Everything You Need to Know About Title Insurance in Ontario.” Protect Your Boundaries, https:// www.protectyourboundaries.ca/blog/post/title-insurance- ontario#:~:text=Title%20insurance%20is%20a%20great%20product%20with%20excellent%20b enefits.,plan%20before%20placing%20a%20bid. Accessed 12 January 2024.
“Title Insurance.” Royal Bank of Canada Website, https://www.rbcroyalbank.com/mortgages/title- insurance.html#:~:text=Title%20insurance%20is%20an%20insurance,before%20you%20purchas ed%20your%20home. Accessed 12 January 12 2024.