April 18, 2021 Legal Matters
When you purchase residential property in Ontario, you also purchase the title of the property (also known as the deed), which is recorded with the Government of Ontario’s land registry.
Before owning a specific property, you will want to check several things, including whether:
There are any encroachments from neighbours onto the property;
You can use the property the way you intend to (i.e., living in the property as your principal residence);
There are no tax or water arrears owing to the municipality from the previous owner;
The previous owner’s mortgage is not registered against the property;
There are is no fraud involved in previous or current transfers of the ownership of the property;
The property complies with municipal by-laws;
The property is located within its legal boundaries;
and the list goes on…
Traditionally, when someone purchased a residential property, they would obtain a “Solicitor’s Opinion” from their lawyer as to the validity and marketability of title. The lawyer would have to conduct several searches and obtain multiple reports from third parties to provide the new potential owner and their lender with a legal opinion. Naturally, these searches and reports were costly, could take several weeks to obtain, and mistakes could be made along the way.
This is where title insurance comes in.
Nowadays, title insurance is an alternative to the Solicitor’s Opinion and insures against loss or damage arising from title defects or other covered risks (i.e., survey issues, encroachments, title fraud, and the legal use of the property). Further, there are many associated benefits as it is easy to order and cost-effective, replaces most of the traditional off-title searches, and can include additional protection against title fraud. While not mandatory, it’s strongly recommended. When purchasing a home, talk to your lawyer about options to protect your interest in the property and reduce the risks.
Reposted courtesy of Mathieu Gémet, Ottawa real estate lawyer. Disclaimer: The content of this blog post is provided for general information purposes only and does not constitute legal or other professional advice or an opinion of any kind. Readers are advised to seek specific legal advice.