Title Insurance. Here is why you need it.
More and more cases of title fraud are being reported by news outlets such as CP24, CBC, Global News, and CTV News. As our valued clients and friends, we want to alert you on how to best protect yourselves and your family members.
Title fraud occurs when someone sells your property without your knowledge or permission. To protect against losing your most valuable asset, purchasing title insurance when closing on your home purchase can save you from going through the financial and time-consuming process of re-establishing your rightful ownership.
What is Title Insurance?
Title insurance protects the legal ownership of property. Although title insurance is not required in Ontario when purchasing property, we highly recommend it. It can protect your home against losses related to the property's title or ownership. Title insurance will insure your property for as long as you live there.
Are you covered?
To verify if you are covered, your lawyer would have given you a 'closing report whenever you purchased your home.' This report will tell you whether or not you bought title insurance at the time of closing.
If you don't have title insurance, here is how to purchase it.
If you didn't buy title insurance during the closing of your property, it is possible to obtain it for a property already owned through a law firm. A lawyer will investigate the property and apply for title insurance with the insurance company on behalf of the homeowner.
Why do you need it, and what does it cover?
By paying a one-time premium, a title insurance policy can protect you against the following losses, according to the Financial Services Commission of Ontario:
Hidden title defects that impede your rightful ownership of the property.
Current liens attached to the property's title due to the previous owner's unsettled debts for utilities, mortgages, property taxes, or condo fees.
Trespassing concerns.
Title fraud.
Inaccuracies in surveys and public records.
Anything that will affect your ability to sell, mortgage, or rent out your property in the future.
Before purchasing a policy, it is essential to fully understand the coverage provided by that title insurance and any exclusions.
Title insurance does not provide compensation for non-title-related issues, such as environmental damages, fire or sewer backup, general wear and tear of the property, and theft.
Total title fraud, what is it?
Title fraud often involves using identity theft to forge documents to transfer a property's title to a fraudster. The fraudster could refinance or sell your home without your knowledge or permission. The people most vulnerable to title fraud are often those who have paid off their mortgages, rent out their properties, or leave their properties vacant for extended periods.
Have you already purchased title insurance? Make sure your title insurance covers the property’s current value.
If you purchased your home years ago, especially before the COVID-19 pandemic, the value of your home has more than likely gone up. Title insurance covers the value of your home at the time of closing or date of purchase of the insurance and will continue to cover up to double the amount as the home value increases over time.
Depending on how long ago you purchased your home, double-check to make sure your title insurance covers the current total value of your home.
How to spot a potential property listed by someone you suspect may be committing title fraud?
Title fraud is on the rise for several factors, such as the COVID-19 pandemic, the increase in conducting real estate transactions digitally rather than in person, or the low-risk, high-reward potential of the fraud.
Here are three things to look out for:
The property is for sale unreasonably low at an under-market value price.
No "For Sale" sign on the property.
Listed off-market and not on MLS.
Ask your real estate agent about these things when looking at a potential property; they can advise you.
We’re here to help.
Please consider purchasing title insurance for your home, as it protects your most significant investment/asset. If you have any questions or concerns about title insurance, please do not hesitate to call us.
