Why closing with the Protocol alone isn’t enough
Jan 20th, 2023 | By FCT
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 had recommended a homeowner’s title insurance policy from FCT back when Sam was closing on the house.
Because of Sam’s small one-time investment in title insurance, the $20,000 cost to remedy this was covered. Had his lawyer closed with Western Conveyancing Protocol (WCP), Sam would’ve had no protection from this significant expense.
In Saskatchewan, many lawyers are still choosing to close with just the Protocol, despite the risks. The Protocol doesn’t provide your clients any protection after their deals close, and only provides lenders limited survey coverage.
Did you know that fewer than 10% of the claims FCT receives are for survey issues? The vast majority of losses homeowners face are from title insurance’s other covered risks. For instance, title fraud is on the rise in Canada—it made up 32% of FCT’s residential claims payouts in 2022.
Without title insurance coverage, a client suffering a loss is often forced to seek legal action in order to recover their funds, potentially even against their lawyer.
Title insurance lets lawyers release residential mortgage proceeds before registration without an up-to-date real property report just like with the Protocol, but it also 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
- homeowner protection against 34 covered title risks, including fraud
- lender protection against 27 covered title risks
Title insurance helps you close deals 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 insureds.
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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