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Your lender could require this. Title insurance is an insurance policy that protects residential or commercial property owners and their lenders against losses related to the property’s title or ownership.
Title insurance is not a requirement in Ontario, however your lender could make this a condition of financing. If the lender doesn’t, then the decision on whether or not you should purchase title insurance should be discussed with your lawyer, title insurance company, or insurance agent/broker. To fully understand what type of protection title insurance can provide you, and to determine if other options exist. Once you get all the facts, you can make an informed decision based on your specific situation and needs. It is essential to keep in mind that title insurance does not replace legal advice when purchasing a property.
For a one time fee, called a premium, a title insurance policy may provide protection from unknown title defects (title issues that prevent you from having clear ownership of the property);
- Existing liens against the property’s title (e.g., the previous owner had unpaid debts from utilities, mortgages, property taxes or condominium charges secured against the property);
- Encroachment issues (e.g., a structure on your property needs to be removed because it is on your neighbor’s property); Title fraud;
- Errors in surveys and public records
- Other title related issues that can affect your ability to sell, mortgage, or lease your property in the future.
Your title insurance policy will protect you as long as you own your property and will cover losses up to the maximum coverage set out in the policy. It may also cover most legal expenses related to restoring your property’s title.
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