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The cost of living in the zone


The idea of living above your own store or small café has a rather unique appeal. No commuting, you’re always on hand for deliveries and you can keep an eye on your business during off-hours. But what if you were to forgo the business use altogether and just use the space as a place to call home without obtaining the necessary permits?

The financial impact of non-conformance

In 2017, Henry Jones* purchased a property in the city of Charlottetown. In 2019, he sold the property to John Smith*. Smith’s lawyer found out that back in 1978 one unit of the building was used for retail and the other as a residence. Both were later used as residential units. According to the City, although zoning permitted duplexes in the area, this particular property was now considered non-conforming as there were no records of a building permit issued or of a City inspector visiting the site. Both of those would be necessary for an official change of use. This led to a zoning violation that left Jones facing out of pocket expenses of $24,276.18.

The importance of title insurance coverage

Jones reached out to FCT to help him find a solution to his problem. Fortunately, he had a residential title insurance policy with FCT that protected him from losses due to building code violations. He submitted his claim and it was approved.

FCT informed Jones of this happy news and advised him to let Smith’s lawyer know we would also be willing to cover any claims and losses arising from this issue should he choose to purchase a residential title insurance policy from us. We also offered to work with Smith after the closing date to resolve the zoning issue. A happy ending for Jones, and a fortuitous beginning for Smith.

While it’s not always possible to be prepared for every eventuality, the outcome for Jones was a positive one because of his foresight in purchasing a policy with the necessary coverage. Even though the coverage was for a property dating back over 40 years, he was still able to get the protection he needed.

Learn more about the benefits of residential title insurance and how to protect your greatest investment or for a quick, secure quote, use FCT’s residential title insurance calculator.


*The names of the individuals have been changed to protect their privacy.

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. Some products/services may vary by province. Prices and products/services offered are subject to change without notice.

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