Is Title Insurance A Requirement?
If you are acquiring a mortgage from an institutional lender, such as a bank, then title insurance will be a requirement for you. The lender requires you to buy title insurance to protect the mortgage amount they lent to you.
Title insurance also holds a lot of benefits for homebuyers. It helps protect your title and ownership to your home. However, it differs from home insurance in that it is a one-time fee. You purchase it at the time you buy your property. Title insurance protects you from title defects, fraud and helps you have clear title to your property.
What Is Title Insurance?
Title insurance insures you against losses that arise as a result of:
- Remaining liens from previous property owners
- Unknown title defects
- Encroachment issues
- Survey errors
The main reason for getting title insurance is to keep clear title to your home. If your title is affected by liens or encroachments, your ability to sell, lease or mortgage your property may be affected. Title insurance will protect you only as long as you actually own your home, and it will protect you up to the maximum coverage amount.
What Is Not Covered By Title Insurance?
Title insurance has limitations in the forms of exclusions and exceptions. That means there are certain things it will not cover. Those things generally include:
- Environmental problems
- Title defects that were known to you
- Liens and encroachments not found in public records
- Violations of applicable zoning bylaw
- Native land claims
To get a better idea of what your own title insurance will or will not cover, read your insurance policy or review it with a lawyer.
Call Our Lawyer Today
If you have more questions about title insurance or other real estate transaction issues, Filice Law can help. Call our Ancaster, Ontario office today at 905-581-2266. You can also use our convenient online form to reach us.