Good title to real property (ie land) means that the owner really owns the property and that no one else has a claim or a lien against it. For example, mortgagees of the person selling the property have rights to the property that need to be resolved before a purchase transaction can proceed to completion. A real estate lawyer makes the necessary inquiries and conducts the necessary searches prior to closing to confirm that on closing you will acquire good (or insured title), to the property free from claims by any other person. The options available for this assurance are:
1. A title insurance policy issued by a title insurance company; or
2. A legal opinion that a purchaser has acquired a good and marketable title to the property, subject to exceptions as described above.
Title insurance is an insurance policy that you can buy to protect your investment in your property if there is a problem with the title. For example, you may find out after you have bought your home that someone else has a legitimate claim to it that has to be satisfied, or you may have to pay to move a building that is too close to a neighbour’s property line. The title insurance policy protects you against the loss that you suffer because of many problems. One of the main protections provided by title insurance is protection against problems that could be discovered by an up-to-date survey. An up-to-date survey will reveal issues such as whether fences are located on the legal boundaries, whether there are encroachments of buildings onto adjoining land or whether buildings on adjoining lands encroach onto the subject property. An up-to-date survey can also be used to determine whether buildings on a property comply with zoning by-laws. The cost of title insurance is generally much less than the cost of obtaining a new survey, and a title insurance policy can be obtained in a shorter time frame.
Title insurance will also protect against fraud. For reasons that include the often short time between execution of a purchase and sale agreement and the closing of a transaction and the cost savings of a title insurance policy over a new survey, title insurance policies have become the norm in residential real estate purchase and mortgage transactions.
If you’re looking to purchase a property, you need experienced lawyers who will work for you. Get in touch with our team today!