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The Greater Toronto Real Estate Experts' Guide to Title Insurance

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You may have heard the term “title insurance” before – this option for home buyers is growing in popularity in Canada. But what is it exactly? Should you get it? Do you need it? Whether title insurance is right for you is something you should discuss with your lawyer, as it depends on the circumstances of your transaction. Below, we have provided some useful background information about title insurance to help you make an informed decision.

Title to Property

Title InsuranceTitle is the legal term for ownership of property. Buyers want "good and marketable" title to a property. “Good” title refers to title appropriate for the buyer's purposes, whereas “marketable” title refers to title the buyer can convey to someone else. Sometimes problems (or defects) regarding title are not discovered before closing, or are not remedied before closing. Such defects can make the property less marketable when the buyer subsequently sells, and they can also cost money to remedy. However, you can reduce the risk of encountering these issues by seeking the help of a qualified home inspector and an experienced real estate professional.

Who is Protected with Title Insurance?

Title insurance policies can be issued in favour of a buyer (on new or resale homes, condos and vacation properties), a lender, or both the buyer and lender. Lenders will sometimes require title insurance as a condition of making the loan. Types of risks that are usually covered under a title insurance policy include survey irregularities, forced removal of existing structures, claims due to fraud, forgery or duress, etc.

In the case of title insurance covering a home buyer, the premium for title insurance is paid once on or before sale completion date and the title insurance remains in effect as long as the insured buyer has title to the land.

Protection and Peace of Mind

Title insurance can help ensure that a closing is not delayed due to defects in title. Moreover, if an issue relating to title arises with respect to a risk covered under the policy, the title insurance covers the legal fees and expenses associated with defending the insured's title and pays in the event of loss.

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Want to know more?

It can be tough to decide, on your own, whether purchasing title insurance will be necessary or appropriate for you as a home buyer. CLICK HERE or visit/call one of our offices to get in touch with Living Realty’s top Toronto area real estate sales representatives and brokers, who can help you understand title insurance fully and make recommendations on how to proceed.