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Can you buy an illegal property without knowing it?


When Juleen Kaur* bought a rooming house in Winnipeg, it seemed like a sound investment. But when she went to renew the rooming house’s license, she was surprised to learn the building violated the city’s zoning by-laws. Her new investment was facing demolition because of an error made years prior.

Almost ten years before Juleen purchased the property, the City had passed a variance order allowing the property to be used as a rooming house. But one of the terms of the variance was that it would be terminated when the property was sold. That meant after changing hands, the property could no longer be used as a rooming house.

When the previous owner sold the property, the City never enforced the zoning violation. Because of that, the new owner never learned that the permitted use of the property had automatically changed. When they sold the property to Juleen, they presented it as a legitimate investment property that just needed its license renewed.

But after Juleen took possession, the City issued a zoning by-law infraction threatening legal action if she failed to comply. Facing tens of thousands in losses, Juleen reached out to FCT.

We helped Juleen through this difficult situation. This included getting quotes for the demolition and removal of the structure. We also had the building appraised to determine its value. A $99,270 settlement covered all costs of removing the building as well as compensating Juleen for her loss.


Why is commercial title insurance so important?

Stories like Juleen’s show why commercial title insurance is an essential part of securing any property. For a one-time premium, commercial buyers and lenders can rest easy knowing their investments are protected. Protect yourself for as long as you own the property with a commercial title insurance policy from FCT.



* Name changed to protect the privacy of the insured

Subject to certain exceptions, commercial title insurance policies equal or below $10M CAD are provided by FCT Insurance Company Ltd. Commercial title insurance policies above $10M CAD are provided by First American Title Insurance Company. Reference should be made to policy documents to confirm the insurer on any individual transaction. 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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