Title Insurance in British Columbia

The last decade has seen rapid change in Canada’s real estate industry amid growing demand for more efficient, less expensive ways to buy and sell real estate. At the same time, title insurance has established its role in Canada, providing real estate professionals with a way to ensure the broad protection of “title”(or the right of ownership in real property), and solve routine defects expediently and cost effectively.

In short, title insurance is an assurance as to the state of title of a given property. In practical terms, it protects lenders and purchasers against loss or damage suffered due to survey  problems, defects in title and other matters relating to title as specified in the policy.
Title insurance is commonly used in residential transactions for the survey coverage it provides.
As a condition of financing, most lending institutions require an up-to-date survey showing that there are no encroachments or zoning problems relating to the property being mortgaged. If a survey is unavailable, the transaction is often delayed until a new one has been prepared at a cost of between $x and $y. Fortunately, most lenders accept title insurance in lieu of a survey, and title insurers can typically issue a commitment to insure within hours of receiving a request for insurance for an urban or rural property.
Title insurance is also used frequently when title defects arise. For example, surveys often reveal problems like a structure that encroaches onto adjoining property. Matters like this are underwritten on a case-by-case basis. Title insurers often provide the lender with a policy protecting it from loss or damage incurred as a result of the insured matter and protects the purchaser by way of an “Enforced Removal and Limited Marketability” endorsement. Such an endorsement assures the policyholder of compensation if they are forced to remedy or move the insured encroachment. The marketability coverage component of this endorsement assures policyholders of enforced removal coverage for the home’s subsequent purchaser when the time comes to sell.

Protection from fraud and forgery is another important aspect of title insurance coverage. Before title insurance, recovery from loss or damage incurred as a result of title related problems was dependent upon a successful claim being made against the solicitor or realtor. Conversely, title insurance indemnifies the insured against loss and damage on a no-fault basis. The insured does not need to prove negligence to make a claim under their policy. Title insurance thereby allows legal real estate professionals to shift some of their professional liability to the title insurer.
In addition to these benefits, title insurance continues to gain in popularity due to other matters
covered by a standard policy. For a single-family residence, other types of coverage include: builder’s liens, work orders, adverse circumstances that would have been disclosed by a local authority search, and forced removal or remedy of work on structures or additions that violate
zoning by-laws or that were constructed without a permit.

The cost of a title insurance policy varies between title insurance companies. However, the  range in price for both a lender’s policy and a purchaser’s policy is from $150 to $250 per residential property.

Title insurance is also available for commercial lenders and purchasers, proving especially
beneficial in multi-jurisdictional transactions and mortgage portfolio acquisitions. In commercial
transactions title insurance frequently solves problems with survey matters and known defects, as well as easements and access to a property, matters which may otherwise qualify a solicitor’s opinion. Given the unique nature of each transaction, commercial policies are customized for each transaction.

The following title insurance companies currently operate in Canada:
• First Canadian Title
• Lawyers Title Insurance Company
• Stewart Title Guarantee Company
• TitlePLUS
• Chicago Title
• London Guarantee Insurance Company

By Marian V. De Souza

Additional information and underwriting policies may be obtained directly from title insurers.
Marian V. De Souza is Legal Counsel for First Canadian Title
(http://www.firstcanadiantitle.com), Canada’s leading provider of title insurance and other
real estate related products and services.