What is Title Insurance?
Title insurance is a type of insurance that provides protection against loss or damage that may occur as a result of defects or issues with the title of a property. It is a form of indemnity insurance that protects both the owner of the property and their lender.
What does Title Insurance cover?
Title insurance covers a wide range of issues that may arise with the title of a property, including fraud, forgery, undisclosed heirs, and errors in public records. It also covers issues related to zoning, survey errors, and encroachments.
How is Title Insurance calculated?
The cost of title insurance is typically based on the value of the property being purchased. In Ontario, title insurance rates are regulated by the Financial Services Regulatory Authority of Ontario (FSRA) and are typically based on a sliding scale. The cost of title insurance can vary depending on the type of policy selected and any endorsements or additional coverage requested.
When is Title Insurance required?
Title insurance is not legally required in Ontario, but it is often recommended by real estate lawyers and lenders as a way to protect against potential issues with the title of a property.
Can Title Insurance be purchased after closing?
Yes, title insurance can be purchased after closing. In fact, many lenders require borrowers to purchase title insurance as a condition of the mortgage. However, it is generally recommended to purchase title insurance at the time of closing to ensure maximum protection.
What happens to Title Insurance when you sell your house?
When you sell your house, your title insurance policy does not transfer to the new owner. The title insurance policy is specific to the owner of the property and their lender, and only provides coverage for issues that occurred during the time that the policy was in effect.
However, some title insurance policies may provide coverage for issues that occurred prior to the policy’s effective date, which could benefit the new owner of the property. Additionally, some title insurance policies may provide extended coverage for issues that arise after the sale of the property, such as forgeries or undisclosed liens that were not discovered during the sale process.
It is important to note that the new owner of the property will likely need to purchase their own title insurance policy to protect themselves against any issues that may arise with the title of the property. This is typically recommended by real estate lawyers and lenders as a way to ensure maximum protection for all parties involved in the sale.
Are Title Insurance costs tax deductible?
No, title insurance costs are not tax deductible in Canada.
Does Title Insurance ever expire?
No, title insurance policies do not expire. Once purchased, the policy remains in effect for as long as the owner or their heirs hold an interest in the property.
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