Title Insurance in Ontario

When purchasing a property in Ontario, your lawyer may recommend that you purchase Title Insurance, instead of the traditional “lawyer’s opinion on title”. It is important that you understand what you are purchasing and what benefits there are to you as a home buyer.
Title insurance protects both residential and commercial property owners against certain losses relating to the property’s title (or ownership). You can purchase Title Insurance (through your lawyer) for a one-time fee that will cover you for the entire time you own the property.

What does Title Insurance cover?

Title Insurance protects against such things as:

• title issues that prevent clear ownership to the property
• existing liens (if, for example, the previous owner had unpaid utility bills, property taxes or mortgage payments)
• title fraud (stolen personal information, forged documents)
• errors in surveys
• errors in public records for the property
• encroachment (structures on your property that my encroach on a neighbouring property or structures on a neighbouring property that may encroach on your property)

Title Insurance will cover losses up to the maximum set out in the policy.  It may also cover legal expenses related to a property title issue.

What Does Title Insurance Not Cover?

When purchasing title insurance, it is important to read the policy and ask questions to be aware of the coverage that is provided. You also need to be aware of possible exclusions, which may include:

• Known title defects (that were revealed to you before you purchased your property);
• Environmental hazards (e.g. soil contamination);
• Native land claims;
• Problems that would only be discovered by a new survey or inspection of your property (e.g. the property is smaller than originally thought);
• Matters that are not listed in public records (e.g. unrecorded liens and encroachments); and
• Zoning bylaw violations from changes, renovations or additions to your property or land that you are responsible for creating.

You need to carefully review your title insurance policy, as it may include additional exclusions and exceptions that are specific to your property.
The Financial Services Commission of Ontario has created a very informative booklet outlining everything you need to know about Title Insurance. You can download a copy here  from their website.