When you purchase a home, the title of the property passes on to you the new homeowner. Your property’s title provides the legal proof that you are the rightful owner.
So when you purchase title insurance, you are protected against a number of risks and challenges that are related to the title of your home. It is not the same as homeowner’s insurance or private mortgage insurance.
What does title insurance protect you against?
Building compliance coverage – if you buy a property that was renovated without the proper permits and if the changes were not in compliance with current building code regulations, the title insurance will compensate the cost of correcting any issues.
Fraud and forgery – unscrupulous individuals can steal your identity and forge documents to sell your home or re-mortgage your home and walk away with the proceeds. While title insurance cannot prevent you from becoming a victim of fraud, it can protect you from many of its consequences and resulting stress.
Encroachment issues – if for instance, you have to defend your title against a neighbor’s renovation that encroaches on your property, your title insurance will cover the costs of the legal defense should it be necessary.
Legal errors during the buying process – you are protected if your lawyer makes a mistake during the buying of your home. With this coverage, your title insurer will rectify the error and reimburse you for any losses, eliminating the cost and hassle of suing your lawyer.
You can also buy title insurance for a home you already own, but the rules are different as any pre-existing conditions cannot be as easily determined as buying a new home.
If you have any questions about this topic or any other real estate questions or concerns, contact us via email or call us on 604 913 1000.