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Real estate is a risky area of law. Conveyancing even a simple deal has so many parts that even with strict attention and due diligence, details can fall through the cracks. Unfortunately, when they do, it can result in massive losses for clients.
Just how much can one honest mistake cost? Here are three claims we received just last year, with one thing in common:
Errors and omissions examples
A lawyer representing a buyer searched the home’s title and saw a notice of security interest (NOSI)—a lien on the property, usually for rent-to-own appliances. They thought it was for a water heater the buyer wanted to keep, but it was actually for the furnace, which the buyer hadn’t agreed to. When the buyer later tried to sell, they had to pay out the cost of the furnace, which got passed on to the lawyer.
Cost: $ 7,198.36
The lawyer representing a couple buying a new build thought the development charges for that property would be capped at $1,500 plus tax. That was incorrect—the development charges weren’t capped at all. The couple closed the deal and ended up having to pay thousands more than their lawyer had disclosed to them that they would.
Cost: $7,797.00
A buyer moved into her condo with plans to renovate it. When she started taking out the walls, she saw fibers, which turned out to be asbestos. The reporting letter her lawyer had prepared when she was closing on the property hadn’t mentioned asbestos. The lawyer had missed the asbestos in their searches, and now that it had been disturbed, it all had to be removed.
Cost: $29,380.00
What’s the thing these three stories have in common? In all three cases, the clients were completely covered, thanks to a $25 payment for the Deal Protection Endorsement from FCT.
When errors and omissions coverage isn’t enough
The Deal Protection Endorsement is an extra layer of protection that you can add to a residential title insurance policy with FCT. The claims limit is equal to the value of the property, so the Deal Protection Endorsement covers you even for large claims, like in the asbestos example.
The endorsement applies to the policy itself, not to your mandatory E&O coverage, or any other E&O protection you have from FCT. That means claims covered under the Deal Protection Endorsement never count towards your E&O claims limits. If you’re a legal professional practicing in B.C., the endorsement covers you directly.
FCT’s Deal Protection Endorsement protects against losses due to:
- errors or omissions in the review of the agreement and documents related to the purchase or financing of the land,
- errors or omissions made in the statement of adjustments,
- failure to conduct title or off-title searches prior to the date of policy,
- failure to obtain additional documents,
- incorrect advice on how to take a title.
Learn how you can sign up for more protection on every deal you close.
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. Insurance brokerage services by FCT Insurance Services Inc. Some products/services may vary by province. Prices and products/services offered are subject to change without notice.
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