When buying a home, most buyers focus on the property’s features, financing, and legal fees. However, there’s another important element that often gets overlooked: title insurance. In this blog, we’ll break down what title insurance is, why it’s important, and how it can provide peace of mind for homeowners in Ontario.
What is Title Insurance?
Title insurance is a policy that protects homeowners and lenders against certain title-related risks that could affect ownership or the property’s value. It covers issues that may not have been identified during the closing process or even by a title search.
Why is Title Insurance Important?
Title insurance may protect you from unexpected problems that could arise with the property’s title, such as:
- Fraud and Forgery: If someone fraudulently claims ownership of your property or if documents were forged in the title history.
- Liens and Encumbrances: Unpaid debts attached to the property, such as unpaid property taxes or construction liens, which might otherwise become the new owner’s responsibility.
- Survey and Boundary Issues: If there are discrepancies in property boundaries or if a neighbor claims part of your property.
- Errors in Public Records: Mistakes in public records, which could affect your ownership rights or lead to costly legal issues.
- Owner’s Title Insurance: This protects the homeowner’s interest in the property. It’s optional but highly recommended for buyers who want to secure their ownership rights.
- Lender’s Title Insurance: This policy is typically required by mortgage lenders to protect their financial interest in the property. Lender’s title insurance doesn’t protect the homeowner directly; it only covers the lender.