Mortgage Tools
The Increasing
Real estate lawyers, mortgage lenders and brokers, and alike are all becoming increasingly adamant about homebuyers purchasing title insurance, with some lenders actually requiring borrowers to obtain it as a condition of their mortgage agreements.
This type of insurance acts as a measure of protection for both homebuyers and lenders against fraud, as well as problems that occurred in the past with regards to the property being insured. Anyone considering buying a home in Canada will have to consider the possible expense of title insurance, which could help save you thousands of dollars.
Title Insurance and Real Estate Lawyers
In legal terms, a title indicates ownership, and the person who holds the title to a property is the legal owner. If you are thinking about purchasing property, you should consider hiring a real estate lawyer, who can conduct a search or survey to ensure that the title on your prospective home is clean, meaning that there are no:
- Outstanding debts against the property, such as unpaid fees, taxes, or bills
- Work orders or issues with the property
- Legal claims against the property
If the sale of the home has already gone through and not all the searches have been completed, there could be unknown and unresolved issues with the property that could become problematic in the future. Title insurance will protect your interests if any such claims are discovered after you have purchased the home.
Title Insurance and Coverage for Property Owners
In situations where pre-existing issues with your property come to light after the closing date, title insurance will protect you from loss or damages in the case of:
- Title defects
- Survey irregularities or incomplete data that would have revealed pertinent issues about the property
- Problems resulting from not having updated information from a property report
- Mortgage fraud or forgery
- Any claims that could require the elimination of structures on the property like garages or extensions
If you require title insurance, it will likely only be necessary for the duration of the mortgage. However, you can also arrange to have the policy extended to cover new owners, or relatives to whom you bequeath the property. The insurance is normally paid once when the home sale is negotiated, and at that time the cost will also be determined.
Government Measures Designed to Protect Consumers from Real Estate Fraud
The Canadian government recently passed legislation to help protect real estate consumers from mortgage fraud. First of all, the government has ensured that property owners cannot lose the title to their property because of:
- A false mortgage being registered with a lending institution
- The fraudulent sale of the home or property
- Forged power of attorney
The government has also improved the process that returns stolen titles to the rightful owners, made it more difficult for fraudsters to register false documents, and increased the fines for offenses related to mortgage and real estate fraud.
