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.
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.