Written by Samantha Wright on August 28, 2018
Title insurance became commonplace for real estate transactions in Ontario in the late 1990s. It replaces some expensive and time-consuming searches like building permit and work order searches. For a one-time fee, title insurance offers coverage for a variety of title issues, and is often cheaper and always faster to obtain than searches.
Title insurance includes coverage for the following:
Title insurance covers you for as long as you own the property, up to the maximum value set out in the policy. It may also cover most if not all legal expenses in restoring title to your property.
There are things that title insurance does not cover. These include:
Title insurance only covers title related issues, not things like structural damage due to weather events, theft, or other situations that are covered by your home insurance.
If you have a mortgage on your property, title insurance covering the mortgage lender is NOT optional. All mortgage lenders in Ontario will require a title insurance policy that protects their interest. Generally speaking, purchasing an owners’ title insurance policy as part of your closing package simplifies the search process when buying a home, saving you time and money, as well as providing valuable coverage for not only the period when you own your home, but also “gap coverage” just in case issues arise on the closing day of your purchase and you want to take possession of a home before the transfer has been registered with the Ontario Land Registry Office.
There are alternatives to purchasing title insurance, but you should discuss these with your lawyer up front at the beginning of the transaction, as doing all the necessary searches takes more time than obtaining a policy.
Purchasing title insurance can be completely handled by your lawyer’s office during a real estate transaction to make obtaining a policy an easy experience. Most firms will utilize a variety of companies who offer title insurance and will select the company that will best provide coverage for your specific needs. If you have any questions about your policy and coverage, be sure to ask your lawyer prior to closing.
Questions about buying a home, mortgages, or title insurance? Contact us!