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When you purchase a property in Canada, you want to be sure that you are the rightful owner with the right to use and enjoy the property. Title insurance provides protection against any unforeseen or unknown issues that may arise with the title to your property. In this blog, we will discuss what title insurance covers in Canada.
Unknown Title Defects
Title insurance covers unknown title defects that could affect your ownership of the property. For example, if there was a forged document in the chain of title, or if a previous owner had a fraudulent claim to the property, title insurance would protect you from any losses incurred as a result of such defects.
Existing Liens Against the Property
Liens can be placed on a property for a variety of reasons, such as unpaid taxes or contractor bills. Title insurance provides coverage against any existing liens that may exist against your property. If a lien is discovered after you purchase the property, title insurance will cover the costs of dealing with the lien, such as paying off any outstanding debts.
Encroachment Issues
Encroachment occurs when a part of a building or structure, such as a fence or shed, extends beyond the property line and onto an adjacent property. Title insurance covers encroachment issues that may arise, such as disputes with neighbors over boundaries or easements.
Title Fraud
Title fraud is a growing concern in Canada, and title insurance provides coverage against any losses resulting from fraudulent activity. For example, if someone steals your identity and takes out a mortgage on your property, title insurance will cover any losses you incur as a result of the fraud.
Errors in Surveys and Public Records
Title insurance covers errors in surveys and public records that could affect your ownership of the property. For example, if the survey shows that your property line extends beyond your actual property boundary, title insurance will cover any legal costs associated with correcting the error.
Title-Related Issues That Can Affect Your Ability to Sell, Mortgage, or Lease Your Property
Title insurance also covers any title-related issues that could affect your ability to sell, mortgage, or lease your property. For example, if a previous owner failed to disclose an easement on the property, title insurance will cover any legal costs associated with removing the easement.
Legal Fees Related to Defending Title Rights
Finally, title insurance provides coverage for any legal fees associated with defending your title rights. For example, if a third party makes a claim on your property, title insurance will cover the legal costs associated with defending your title.
In conclusion, title insurance in Canada provides protection against a wide range of issues that may arise with the title to your property. It is important to consider purchasing title insurance when purchasing a property to ensure that you are protected against any unforeseen or unknown issues that may arise with the title.
