The Benefits of Title Insurance When Purchasing Your Home

When you buy a home, one of your lawyer’s responsibilities is to ensure you obtain “good title” to that property. This means that you are the registered owner of your home subject only to certain liens and encumbrances such as your mortgage, municipal agreements with developers, easements for utilities, etc. It also means that your home is not subject to any work orders or deficiency notices from local agencies such as the municipal building department, fire department, electrical safety authority, etc.

In order to ensure you have good title, a lawyer must not only search title to the property to see if there are any unauthorized encumbrances, but also write to all federal, provincial, regional, local municipal or other governments, departments, boards, agencies or other authorities having or claiming jurisdiction over the property to make sure the property is in compliance with all laws, orders and regulations. The cost of performing these searches on behalf of the purchaser is hundreds of dollars, not counting any additional fees your lawyer may charge for doing them.

A title insurance policy reduces the number of searches your lawyer must do in order to provide you with an opinion that you have obtained “good title” to your home, thus giving you the protection you require and saving you money on closing costs.

In addition, title insurance offers coverage for the following common issues:

• Lack of an up-to-date survey – protects you against not being able to sell or finance your home as a result of defects an up-to-date survey would have disclosed.
• Fraud and forgery – protects against fraudulently registered mortgages and covers your legal costs and expenses while proving a fraud has been committed.
• Municipal coverage – covers you for such issues as: improvements made without a permit that result in a loss, outstanding work orders, taxes owed by previous owners, your property failing to meet local zoning requirements, unregistered easements, compliance with subdivision/development agreements, and many more.

A title insurance policy is a one-time premium that covers you as long as you own your home. So when it comes time to purchase your first or next home, ask your lawyer about the benefits of title insurance. After all, a home is often the biggest purchase most people will ever make, so it makes sense to do all you can to protect that investment.

If you have any questions about title insurance or any other real estate matters, please contact us.

The foregoing should not be considered to be legal advice and should not be relied upon as such. Please consult a lawyer to get advice and an opinion on your unique circumstances.