Title Insurance
Title Insurance is unlike any other kind of insurance. It
is not home insurance, which protects the contents of the house or
the structure; it is an insured statement of the condition to the
title of the property at the time the policy is issued. Title
Insurance provides protection against issues like survey defects,
unpaid liens, encroachment issues, construction liens, defects in
title, costs arising from building code violations, as well as real
estate fraud.
The incidence of real estate title fraud in Canada continues to
be on the rise. In spite of recent changes to legislation in
Ontario, this type of fraud can have devastating personal and
financial effects on its victims, all of which can be prevented
with title insurance. As your trusted advisor, we are taking a
proactive approach to help protect you from the devastating effects
of real estate title fraud.
When real estate title fraud happens, a fraudster has
typically done the following:
- Forged the property transfer/deed;
- Registered the title in his or her name;
- Forged a discharge of the home's existing mortgage; and
- Borrowed against the clear title.
Real estate title fraud is when someone makes a claim against a
homeowner's ownership of the property. Here is one of many
stories that illustrate how title insurance can protect you.
The Problem
Real estate title fraud is widespread across Canada. Real
estate industry insiders now peg the average of real estate fraud
at $300,000. In comparison, the RCMP estimates the average
credit card fraud case in Canada to average $1,200. Industry
insiders estimate that real estate fraud costs Canadians between
$300 million and $1.5 billion each year. If real estate fraud
occurs, the onus is on the homeowner to prove the crime and it can
be very costly, financially and emotionally, to restore
title. However, despite the rise in title fraud and a booming
real estate market that is pushing housing prices to all-time highs
in many communities across the country, a survey commissioned by
First Canadian Title in 2005 suggests the one in three Canadian
homeowners has no knowledge of one the most important ways to
protect their biggest investment - title insurance.
The Solution
Title insurance protects new and existing homeowners, commercial
property owners and lenders against losses as a result of title
defects and claims against a property uncovered in a title
search. Title insurance provides protection against issues
like unpaid liens, encroachment issues, construction liens, defects
in title, costs arising from building code violations, as well as
real estate title fraud. The Consumers Council of Canada
(CCC) recommends the purchase of title insurance for both new
homebuyers and existing homeowners, based on findings from a CCC
study, which was also released in 2005.
For a one-time premium, title insurance covers all legal
expenses related to restoring a title and is also available to
existing homeowners long after they have purchased their
properties.
