In today’s real estate environment, there can be many unforeseen factors that can affect the future marketability of your title. These include fraud, forgery, zoning by-law infractions, and discrepancies not revealed by a property survey. In addition, errors and oversights may occur, which could also jeopardize title. These issues may only come to light later, when the property is being resold or refinanced. The resultant solutions can often become complex and costly.
Protection against such complications has been offered in the United States for over 100 years in the form of title insurance, and now, Travelers Guarantee brings this coverage to a growing Canadian market with Title Insurance. Title Insurance provides full protection against title problems, and joins a host of highly respected real estate insurance and warranty products offered by Travelers Guarantee, including:
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New Home Warranty in B.C. – Excess Condominium Deposit Insurance –
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Ontario New Home Warranty Bonds – Condominium Conversion Deposit Insurance
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Excess Deposit Insurance for Freehold Homes – and Equity Edge™ New Home Deposit Bonds
What is Title Insurance?
The Coverage
Title Insurance provides the purchaser and the lender with comprehensive no-fault protection against title risks inherent in real estate transactions, including:
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Defects in title to the property
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Unmarketability of title
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Liens on the property
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Encumbrances and their priority
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Survey errors
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Adverse claims to property
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Fraud and forgery
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Invalidity or unenforceability of the insured mortgage on title
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Authenticity of registered documents on title
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Forced removal of structures on the insured property
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Known risks which can be added to coverage to facilitate the transaction
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Other matters specified in the policy
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Legal services provided by the lawyer with respect to the insured property*
*legal services coverage is only available for certain title insurance programs
The Title Insurance policy guarantees that the insured owner or lender has a direct claim if the specified title risks cause a loss, regardless of the source of the loss, and without any requirement to prove negligence. In addition, depending on the title insurance program, the Title Insurance policy can be tailored to suit the particular needs of the insured, either as stand- alone coverage or in conjunction with other Travelers Guarantee real estate-related insurance products.
Why Get Title Insurance?
Protection from financial loss In any real estate transaction, a great deal of trust is placed in lawyers and their staff. Despite the dedicated efforts of these real estate professionals, it cannot be automatically assumed that every potential problem threatening a title will be identified. Should title problems subsequently surface, the courts will not necessarily hold the lawyer liable for what might be determined to be an unavoidable oversight – an unfortunate result. Title Insurance, however, responds even to the unavoidable oversight, and can either rectify the problem or, if a loss is sustained, protect the insured owner or lender up to the full amount of the policy.
Advantages of Title Insurance
The advantages offered by Title Insurance are considerable and include:
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no-fault recovery of losses;
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the payment of all related claim costs;
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broad coverage including title defects resulting from negligence of the lawyer;
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a reasonable one time premium;
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timely closings; and
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the flexibility to arrange special program coverage not available elsewhere in the market.
Who Benefits From Title Insurance?
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The Owner
Protection is provided from financial loss due to covered claims that may be asserted against the title to the insured property—up to the face amount of the policy
Payment of legal costs is included if Title Insurance has to defend the owner‘s title against claims. These expenses don’t reduce the amount of policy coverage
Payment of successful claims against the title to the property is covered by Title Insurance, up to the face amount of the policy
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The Lender
In addition to the aforementioned title coverage provided to the owner, Title Insurance lender coverage ensures the validity and enforceability of a lender’s security interest as well as its priority position. It further provides for protection of assignees of the lender’s security including mortgage loan insurers. Title Insurance lender coverage can be specifically designed to meet a lender’s special needs. It is especially suited to the new housing and condominium market, where it not only provides cost effective and comprehensive title protection, but, in conjunction with Travelers Guarantee’s other development-related insurance products, it provides the insured lender and developer with a distinct advantage in the marketing and promotion of their financial products and developments.
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The Lawyer
Title Insurance replaces the lawyer title opinion, usually received by the client (owner or lender). Instead, the lawyer works with Travelers Guarantee to underwrite the title and provide the client with a Title Insurance policy. In the event of a problem, the insured owner or lender looks to Title Insurance for no-fault title protection. As a result, the client no longer has to be concerned about negligence or oversights, thus preserving the solicitor / client relationship.
