Gap Coverage Extension
Mar 26th, 2020 | By FCT
At FCT we are doing our part to alleviate some of the worries that come from delays or closure at land titles/registry offices by offering Extended Gap Coverage to legal professionals. This coverage is available to you for your commercial and residential transactions, at no additional cost.
Our purpose in doing this is to help minimize the impact to your businesses. In the event there is a disruption to provincial land titles/registry offices, we have streamlined the process so that you are free to advance mortgage funds without restrictive conditions and close your transactions despite the fact that closing documents are not registered on the same day.
FCT’s title insurance policy provides protection for any loss that results should a registration occur between the period that a title search is conducted and the closing documents are registered at the land titles/registry office.
Close with confidence
If you are unable to execute documents due to the closure of provincial offices, please don’t hesitate to contact our underwriting team, who are working diligently to help you close your deals.
Please feel free to reach out to us at the following toll-free numbers:
Residential title insurance: 1.866.804.3122
Commercial title insurance: 1.866.804.3112
Quebec title insurance 1.866.744.8962
Insurance by FCT Insurance Company Ltd., with the exception of commercial policies. 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. 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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Is this Gap coverage automatic (i.e. included in the policy without an express endorsement) and if so, where can I find it and if not, do we have to expressly order a gap coverage endoresement?
Hi Kin-Bun,
I will forward your question to the appropriate contact. Someone will reach out shortly.
Regards,
FCT
Hi Kin-Bun,
The term “gap coverage” is commonly understood to mean coverage for instruments that are registered on title in the gap between documents are ready to go for registration and the time they are actually registered on title. There is no specific endorsement required for gap coverage. In FCT’s commercial policies there is a specific covered risk that covers losses arising from gap registrations. For example, covered risk 14 in the commercial loan policy provides coverage for losses arising from “Any defect in or lien or encumbrance on the Title or other matter included in Covered Risks 1 through 13 that has been created or attached or has been filed or registered in the Public Records subsequent to Date of Policy and prior to the registration of the Insured Mortgage in the Public Records or by reason of the Insured, for reasons beyond its control and despite its best efforts, being prevented from effecting registration of its interest in the Land, provided the title search is brought up to date as of the Date of Policy and the Insured is making reasonable efforts to effect registration with a minimum of delay.” There is similar coverage in covered risk 10 of the commercial owner’s policy.
In FCT’s residential policies, gap coverage is provided by way of a notation next to the policy date on schedule A of both lender’s and owner’s policies . In the case of an owner’s policy the notation says “The Policy Date shall be deemed to be amended to correspond with the registration date of the transfer of the interest to the Insured” in the case of a lender’s policy the notation says “The Policy Date shall be deemed to be amended to correspond with the registration date of the insured Charge/Mortgage.” This notation means that anything that goes on title after the date written on the policy but before the transactional documents are registered, exists on the policy date and would be covered under the policy.
Please note the foregoing is general information and all claims are reviewed for coverage based on the specific facts of the particular situation.
Regards,
FCT