What is it?
Title insurance is an insurance policy that protects the lender (banks) and the property owner against a number of risks related to the property title/ownership.
If you are buying a home in BC you can expect title insurance to be required by your lender. Your lawyer will process the title insurance and it will be including in your lawyers closing costs statement (statement of adjustments).
What does Title Insurance Cover?:
The main item it covers is fraud. With identity theft on the rise it has become a necessary protection. Title insurance protects that property from fraudsters claiming to be the owner of the property and then selling it or obtaining a mortgage against the title.
Title insurance can also cover other items such as:
- Viloations of municipal by-laws
- Proeprty tax arrears
- Existing work orders
- Lack of legal access to the property
- Unptaid strata assessments
- Zoning and setback non compliance
- Forced removal by a governmental authority of a structure built without required permit
- Legal status of any septic system
- Encroachments onto an adjoining property
Cost of Title Insurance:
For properties with a purchase price under $1,000,000.00, the cost of title insurance is generally $225.00, with $175.00 to the Lender Policy, and $50.00 to the Owner Policy. For every additional $1,000.00 over a purchase price of $1,000,000 the price increases by $0.90.