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The importance of title insurance in Ontario

People who are in the process of purchasing a home might also consider purchasing title insurance. While it is not a requirement, title insurance may be very beneficial to potential homebuyers. The coverage can protect the property owner from potential losses associated with the ownership of the title and typically ends only when the title is transferred to another person.

One issue that might help is a lien against the title due to a debt that was left unpaid by a previous owner. Other title issues could include public record and survey errors, boundary line disputes and issues that might encroach on a future sale, lease or mortgage of the property. A problematic title could disallow a legitimate owner from effectively leasing, mortgaging or selling the property if they choose to do so. Additionally, title insurance may provide gap coverage for buyers who wish to close even though they have not yet completed their title registration. Without the insurance, buyers might face closing process delays until the property title's registration is complete.

Title insurance might also protect people from losses resulting from title fraud and lawyer errors. Title fraud takes place when a criminal, using forged or stolen documents, tries to transfer the property's title into their name without the victim's consent or knowledge. Although title fraud rarely occurs, the insurance might pay for legal fees associated with reinstating the title.

Many people who are involved in a residential real estate transactions, retain a lawyer to help settle any unexpected disputes about the property, costs or the paperwork. Throughout the complicated process, an experienced lawyer might help ensure that the client's rights are protected.

Source: The Star, "Ask Joe: Consider title insurance when buying a home," Joseph Richer, March 20, 2015

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Yigal Rifkind, Barrister & Solicitor Attorney

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