Title insurance is precious

BY JAY BRIJPAUL

Title in real estate is a form of ownership. It’s not a specific document. It brings you the right to use the property. In a way, it’s a journal of that property. A deed, on the other hand, is a legal document that declares ownership. When you buy a property, you will receive the deed which affirms that you have title to the property. When there is a mortgage in place, the deed is transferred to the lender and the owner receives a document called a transfer deed.

Title fraud results when someone snatches a property by altering a deed. They immorally transfer ownership. The thief can now sell the home or arrange a mortgage against it. Usually, the real owner is unaware of the crime until they receive notices from the lender. Title fraud has increased drastically over the years.

A scammer’s prime target is seniors. Many seniors are mortgage free or have small mortgages. For the scammers, there is a ton of loot. Small investors are good targets for scammers as well. Investment properties are usually tenanted. Landlords generally pay less attention to their investment properties and may miss important documents such as bank notices. Knowing this, scammers have extra time to clean the safe.

When fraud is committed, the property does not belong to the fraudster or the new buyer. The documents are fake. However, it is expensive to correct the problem. Court can be costly and take years to resolve. The answer is title insurance.

Title insurance is a one-time purchase that is good for as long as you own the home. The best place to start is to check whether you already purchased title insurance. When you bought the home, your lawyer would have provided you with a stack of real estate papers. Among them, you may find a copy of the title insurance certificate. There are two kinds of policies. These are homeowner policy and lender policy. A lender policy protects the lender and not the homeowner. It’s important to have a homeowner policy. If you do not have homeowner’s title insurance, then its best to purchase it as soon as possible. The insurer will not cover you if the insurance is taken out after the fraud has happened.

You can purchase title insurance from First Canadian Title (FTC). Their website is Ftc.ca and their phone number is 1-866-804-3122. You can also email FTC at residentialsolutions@ftc.ca. If you bought the home over six months ago, then you can buy title insurance directly from FTC. Other than that, contact your lawyer. When buying title insurance, the owner must provide the date when the home was purchased and the estimated market value of the property. In the event of title fraud, FTC will step up and pay the costs plus legal fees to restore a homeowner’s title.

When a buyer unknowingly purchases a home from a fraudster, the buyer cannot resell that home to recover the losses. The home still belongs to the original owner. If the buyer has bought title insurance during closing, the insurer will take on the duty to defend that client. They will investigate the claim, retain council and compensate the buyer.

In addition to protecting the title of the property, title insurance has more advantages. A buyer’s lawyer has to research the entire history of the property. With title insurance, the lawyer does not require to research the entire history. The lawyer can view the last four or five entries. This saves time and costs the buyer less.

Prior to title insurance, lenders wanted a survey of the property. If the seller could not provide one, then the buyer would have had to hire a surveyor. This cost thousands of dollars. With title insurance, lenders have ditched the requirement for a survey.

There are many incidents where improvements are made to a home without obtaining a building permit such as building a deck or finishing the basement. If the home is inspected by a city inspector and the improvements are not up to code, the owner ought to apply for a building permit and retrofit the improvements. This can be costly. Title insurance covers that cost.

Sometimes, exterior structures, such as a garden shed, partly sits on the neighbouring property. When there is a disagreement, title insurance will take over and cover the cost.

A common problem occurs when a previous owner is in arrears for property tax. That responsibility runs with the property. The arrears are transferred to the new owner. If the new owner has title insurance, the insurer will pay that cost.

We are living in a time where internet pirates can ruin our ship. Homeownership in the electronic age is under protected. A hacker can sell our home or remortgage it and bag the cash while sitting on a beach in a different country. Let’s protect ourselves. Let’s buy homeowner’s title insurance.