Hardwood floors, granite countertops and a gorgeous backyard – you have finally found your dream home or cottage in Muskoka, put in your offer and signed the purchase agreement. The deal is almost done! But what about title insurance? If you’re not exactly sure about title insurance and whether it’s something you really need, here are a few facts you should know:
What is title insurance?
To understand what title insurance is, it’s important to first understand what title is. ‘Title’ is a legal term that basically means that you legally own a property. When the previous owner signs the deed over to you, the title to the property (and all that it encompasses) is transferred to you and registered under your name in the municipal government’s land registration system. Essentially, title insurance protects individuals against any loss that may occur that relate to the property’s title or ownership.
What does it cover?
Depending on your title insurance policy, you may be covered against errors in surveys and public records, unknown title defects, liens against the property title, title fraud, encroachment issues and any other issues that could prevent you from selling or mortgaging your property. Any legal expenses you incur as a result of title issues that arise could also be covered by your title insurance.
It’s also important to be clear about what is not covered in your title insurance policy. Title insurance does not protect you against Indigenous land claims, unrecorded liens and encroachments, zoning bylaw violations, environmental hazards such as soil contamination and known title defects that were revealed to you. Title insurance also does not protect you against things like theft of chattels, damage to your property or other non-title related issues. Most title insurance policies will protect you from title fraud.
Is it required?
When purchasing a home or property in Ontario, it is not required to also purchase title insurance. Title Insurance is usually required by a financial institution or private lender when they mortgage a property. Even if you do not have a mortgage, title insurance is something to carefully consider. Discuss title insurance with your real estate lawyer before making your final decision in order to ensure you are making the best and most informed choice.
What are the different types of title insurance?
Title insurance can be purchased for both residential and commercial properties in Ontario. You can opt for an Owner’s Policy, which protects the property from any title-related losses laid out in the policy to a maximum amount. The other option would be to opt for a Lender’s Policy that protects the lender from losses in the event that the mortgage on the property is, for some reason, invalid.
Still not sure whether title insurance is something you really need or what exactly is involved? Don’t worry! As experienced real estate lawyers working in the Muskoka region, we know the ins and outs when it comes to real estate transactions and can provide you with the knowledge and honest guidance and support needed to make the right decision. We can also help you throughout your entire real estate journey. Set up an appointment to meet with our team today at (705) 645–8743 today to learn how we can help you take the stress out of your next real estate sale or purchase.
