What does Title Insurance Cover?

Any detailed comparison of either owner or lender policies as well as residential or commercial packages goes well beyond the scope of this text. For descriptive purposes, title risks for residential property (owner’s policy) provide some indication of the scope of such coverage. The following is not an exhaustive list, but includes the typical risks that are covered when the condition of title is other than stated in the title documents.

  • A document relating to the title is not properly signed or is otherwise defective; e.g., not sealed or delivered.

  • A document was defectively registered on title; e.g., a defect in a lien, charge or other encumbrance.

  • Some form of forgery or fraud in documents affects title to the property.

  • An inability to access the property is uncovered; i.e., the legal right for pedestrian or

    vehicular access.

  • The title is unmarketable for a number of reasons that result in a person refusing to

    perform a contract, lease or make a loan.

  • Acontraventionofamunicipalby-lawoccurs;e.g.,theownerisforcedtomoveorother-

    wise remedy a structure (or any part thereof) due to a violation of zoning by-laws.

  • A contravention of a subdivision, development agreement or other agreement relating

    to the development of the property.

  • Construction liens are discovered on title (that had not been previously agreed to be


  • Other individuals claim rights over the property not identified in the title documents

    arising from leases, contracts, options or some other possessory right.

  • A lien on title is discovered that may have a priority; e.g., arising from a judgment, a

    mortgage or a public utility account.

  • Certain restrictive covenants may exist that affect the use of the land.

  • Someone else owns an interest in the title.

    A detailed review of individual policies is required along with expert advice. Practitioners should also be aware that title insurance is a relatively new concept in the Canadian marketplace. Consequently, many policy wordings and issues surrounding title insurance lack interpretation through Canadian courts.

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