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Title Insurance: What is it and Why do I need it?

What is Title Insurance?

Title Insurance is an insurance policy that protects interested parties against deficiencies or undiscovered problems with a property.


Who can obtain Title Insurance?

Buyers or owners of a property and their lenders commonly obtain Title Insurance prior to completing transactions associated with the property. Title Insurance protects buyers and homeowners for the life of their ownership of the home.


Why do I need Title Insurance?

Title Insurance is most often obtained by a buyer in place of reviewing a Real Property Report ("RPR") for the property. An RPR is a drawing showing the state of the property including the location of the home or other buildings on the property. If there is no RPR or the RPR does not show the current state of all the buildings and structures on the property, then the buyer is at risk that the buildings do not comply with municipal bylaws, among other things. In that case, the building may need to be altered or moved in the future in order to comply at great cost to the owner. If the seller does not have an RPR, or does not have enough time to obtain an RPR before completing the sale, it is common for a seller to compensate the buyer by paying for Title Insurance.


Some other benefits of title insurance include coverage for the following:


a. Unknown title defects preventing the buyer from having clear ownership of the property;


b. Existing liens against the property caused by the seller;


c. Errors in surveys or the public record;


d. Title fraud;


e. Gap coverage before title registration at the Land Titles Office; and


f. Other title related issues which may affect the buyer's ability to sell, mortgage or lease the property in the future.


What is the cost of Title Insurance?


The cost of Title Insurance is a one time fee that fluctuates depending on the price and a number of other factors about the property. For the majority of residential transactions under $500,000, the cost will be between $219 - $279.