Sam Jones* had been living in his home for a few years before he decided to apply for a permit to renovate his house. In reviewing his application, the city discovered that permits were never issued for his finished basement, enclosed porch, air conditioner, hot tub and basement gas fireplace, which were all installed by the previous homeowner.
Unfortunately for Sam, he now had to apply for permits for all the work already done in his house and make any necessary fixes. Luckily Sam’s lawyer recommended a homeowner’s title insurance policy from FCT, so the $20,000 cost to remedy this was covered. Had he closed with Western Conveyancing Protocol (WCP), Sam would’ve had no protection from this significant expense.
In Alberta, many legal professionals choose to close with just WCP. It lets them release residential mortgage proceeds before registration without an up-to-date Real Property Report (RPR),** but if no known survey defects exist, it doesn’t offer the same amount of protection as title insurance. With WCP, only lenders get survey coverage, and both the lender and homeowners get gap coverage.
Title insurance also allows a lawyer or notary to release residential mortgage proceeds before registration without an up-to-date RPR, but offers more extensive coverage such as:
- survey coverage to lender and homeowner;
- potential coverage over known survey and other defects;
- gap coverage to lender and homeowner;
- coverage for loss as a result of intervening registrations, if the registration occurs because Land Titles rejects the transfer/charge due to clerical or typographical errors;
- homeowner protection against 34 covered title risks, including fraud;
- lender protection against 27 covered title risks.
Title insurance helps deals close on time, while offering homeowners more protection against risks like encumbrances, unpermitted work by previous owners and even fraud. Your clients’ exposure doesn’t end when they take possession, so why should their coverage? Keep your clients protected for as long as they have an interest in their property with a residential title insurance policy from FCT.
*Name has been changed to protect the privacy of our clients.
**Survey or Certificate of Location where applicable.
Insurance by FCT Insurance Company Ltd. Services by First Canadian Title Company Limited. The services company does not provide insurance products. This material is intended to provide general information only. For specific coverage and exclusions, refer to the applicable policy. Copies are available upon request. Some products/services may vary by province. Prices and products/services offered are subject to change without notice.
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