Do your clients really need title insurance for a condo?

Sep 19th, 2019 | By FCT

Among condo owners, we’ve noticed a general misconception that survey coverage isn’t relevant for condos so title insurance isn’t relevant.

While title insurance does include survey coverage, that isn’t the only reason to advise clients to get it. Consider the case of Tom and Susan*:

Four days after closing on their condo, Tom and Susan were happily unpacking boxes when they received a notice from the condominium corporation. It informed them about a special assessment of over $30,000 that they now owed. This assessment was not mentioned in their status certificate and having spent most of their savings on the condo, they were alarmed by this new bill. And that’s where we came in. As the condominium corporation had known about this upcoming assessment and failed to disclose it in the status certificate, we paid it out, saving Tom and Susan from an expense they couldn’t afford.

Title insurance is particularly important for condos because it covers construction liens and failure to disclose information on the status certificate that would result in a special assessment or increase in common expenses, like in the above case. It also offers standard owner’s coverage like:

• Lack of permits

If a previous owner renovated without getting the required permits and the municipality or the condominium corporation is forcing you, the new owner, to fix it.

• Tax and utility arrears

If the taxes and utilities of the previous owners are not up to date and it falls on you to pay it. This coverage is especially relevant in Vancouver as it protects new owners against the Empty Homes Tax.

• Fraud

If someone impersonates you to get a mortgage on your property or to sell your house without your knowledge.

• Work orders

If there were unknown outstanding work orders before the date of the policy.

With title insurance, your clients are protected from the above risks and more.

*Names have been changed to protect the privacy of our clients.
This is for general information only. At the time of ordering, please specify that the property is a condo to receive condo endorsements. For specific coverage, please refer to the title insurance policy or an FCT representative.

9 Responses to “Do your clients really need title insurance for a condo?”

  1. Ralph says:

    I’m looking for this insurance

  2. Sunny says:

    Should not have any special assessment Or tax owing.

  3. Sunny says:

    What’s the benefit of title insurance on a new condo construction? There’s no previous owner other than the builder. It’s a new building so should have any special assessment or tax owing.

    • Rebecca Christoforidis says:

      Hi Sunny,
      It’s true that the risk of monthly common expense arrears and special assessments is low on a brand new condo but title insurance on a new condominium offers protection beyond special assessments and common expense arrears. One coverage that immediately springs to mind is found in covered risk 14 which covers situations when “After the Policy Date, a Governmental Authority assesses supplemental real estate taxes not previously assessed against the Land for any period before the Policy Date.” On any purchase of a brand new home, there is always a risk of supplemental and or omit taxes. In addition, you get coverage for forgery or impersonation affecting your title after the closing date.


  4. Liliana Grunmann says:

    If I don’t get on time the renewal of the Land survey , do I need a title insurance until the survey is done for a condo .
    Only because the old land survey have expired 4 month ago

    Thank you

    • FCT says:

      This sounds a bit of a legal question and for a specific answer, we suggest you speak to your lawyer or notary about your specific case but there is no requirement for a survey for the issuance of a title insurance policy. We don’t see many survey related claims on condominiums but that doesn’t mean they don’t happen. Like we said in our blog, the coverage for condominiums under a title insurance policy extends far beyond survey issues and includes such things as lack of permits, fraud, and utility arrears.

  5. Robert Greaves says:

    We have been in our townhouse/condo for 9 years and are thinking about title insurance to protect us from possible fraud. How do we go about this process and what is the cost? Thanks.

    • FCT says:

      Hi Robert, thanks for reaching out! The cost of a title insurance policy varies based on the property itself. You can call 905-287-3380 or 1-877-888-1153 and we’ll be happy to get you a quote and walk you through the process.

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