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Why you need title insurance for your condo


Living in a central location, enjoying the amenities, not having to shovel snow—there’s lots to love about owning a condo. But don’t forget: your condo needs protection just like a house would. In fact, condo units carry risks that freehold properties don’t because of how condo ownership works.

Condo corporations

If you own a condo unit (or a strata unit, if you’re in B.C.) you own the unit itself, and you partially own the shared spaces. You and the other owners need a way to manage the maintenance and repair of common spaces and elements, and to keep any one owner from making changes that the rest of you disagree with.

That’s why every condominium or strata has a corporation that represents the owners’ collective interests. Condo corporations are an essential part of making sure everyone involved is treated fairly, but they also introduce risks for unit owners. Sometimes, condo corporations make mistakes, which can leave unprotected owners on the hook for major expenses. Here are two common examples:

Uncommunicated special assessments

Condo corporations need to raise funds for unexpected expenses, which they do by voting on special assessments—one-time fees that the owners share based on unit size.

The corporation has to notify all the affected owners, but that doesn’t always happen in time. If you buy a unit with a special assessment the corporation hasn’t told you about, you can find yourself owing thousands of dollars soon after moving in.

In a recent example, a couple moved into their condo unit in Ontario, and a little while later got a bill for $20,542.09. It turned out that months before the couple moved in, the condo board had voted on a special assessment to top up its reserve fund. The couple’s condo status certificate hadn’t mentioned the fee. Fortunately, they had title insurance, which covered the full amount—without that protection, they’d have been stuck.

Municipal violations by the corporation

Risks like zoning issues, violations of restrictive covenants and unpermitted work from previous owners apply to nearly every property. In a condo or strata, the corporation is more likely to run into those issues than you are. But losses from municipal violations can and will pass down from the corporation to you.

For example, the owner of a condo unit learned that his building had several open permits from a previous owner’s construction. His share of the fee was $31,108.26 for an open permit on his unit, as well as two open permits on common areas. Since they were from a previous owner, his title insurance policy covered the full amount.

Protecting your condo’s title

Looking to buy a condo? Make sure to speak with your legal professional about title insurance from FCT. It’s the only way to protect yourself against losses like the above examples, as well as from other risks, like title fraud.

If you already own your condo but don’t have title insurance, it’s not too late. Speak with your legal professional about how an Existing Homeowner’s Policy can protect you and your condo, no matter how long you’ve owned it. You can also sign up for a policy, and get protection and peace of mind today.

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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