If you are thinking about taking the leap into property ownership, you are going to have to purchase Title Insurance, which is the modern day version of paying hundreds of dollars to have your property surveyed and staked and it is a mandatory add-on with the purchase or any property these days. Back in the day, you’d spend a bunch of money to a professional surveying company and they would send out a person to figure out exactly where your property lines were and put some little metal stakes in the ground at the corners. Well today, most people do not opt to go that distance when they buy a property because a land survey might run you anywhere from $500-$1500 (depending on if you want spray painted markers, wooden posts or official metal pegs).
If you are thinking about diving into home ownership, it is important that you know what title insurance is and the importance of having some on your soon-to-be investment.
What exactly IS title insurance, you ask?
In plain terms, title insurance protects your property ownership interests.
And what is it that you need protecting from?
When you buy a property, you hope and pray that all the due diligence and research that you did during your subject removal period (see my Buyer video series to learn more about that HERE) uncovered any unsavory things well ahead of the curve, but sometimes, there are unknown title defects that show up later down the road, which is where having title insurance can be an incredible safety net to face the unknown. Here are some examples of what I mean (this list is not exclusive):
- False claims of interest (ownership) of your title
- Fraud, forgery and false impersonation affecting the validity of your title
- Pre-existing liens against your title (i.e. realty tax arrears, municipal utility liens)
- Municipal zoning by-law violations
- Various encroachments on your property or of your property to adjoining land
- Existing work orders
- Restrictions of legal access to the property
- Unmarketability of land due to adverse matters that an up-to-date survey/ Real Property Report (RPR)/ Building Location Certificate would have revealed
That’s great, but will Title Insurance cost a fortune to get?
The cost to get title insurance is very reasonable for what protections it offers you. Generally speaking, the premium is a one-time fee that is valid for coverage for the entire time you own your property and can run you between $150 to $350 (usually around $250 in British Columbia). The policy coverage amount is typically equal to what you paid for your property.
Good to know, so how do I actually get Title Insurance?
Last, but not least, it’s important to know where this valuable insurance can be found and purchased.
Typically speaking, when you are signing on the dotted line at your lawyers office to make the exciting purchase of your new property, the lawyer will have included in your stack of papers a mandatory purchase of title insurance through a reputible company that they have worked with before. BUT, if for some reason you want to do the research and select your own title insurance company, if you Google “title insurance”, you will be inundated with options for different companies and some are better than others, of course. I would suggest that you call a few places and get quotes to compare apples to apples; prepare a few questions and ask each company the same questions so that you really do get a fair comparison. If you are curious which companies I recommend to my clients, shoot me a message and I would be happy to share with you or ask your lawyer who they recommend as lawyers often have good connections and preferred partners that they use as well.
If you do not have title insurance yet, today is the day to change that and protect your right to your property!